Turnaround Investment Trust – ‘497’ on 7/3/07

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 1: 497         Turnaround Investment Trust                           55    306K 

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CUSIP Number 900215104                                      NASDAQ Symbol TURNX 

Prospectus                                                                      
                                                                 June 28, 2007
________________________________________________________________________________

 THE TURNAROUND FUND(TM)
 A NO-LOAD MUTUAL FUND

This prospectus includes information about The Turnaround Fund ("Fund") that you
should know before investing.  You should read this prospectus  carefully before
you invest or send money, and keep it for future reference. For questions or for
Shareholder Services, please call 1-800-773-3863.                               

Investment Adviser
------------------

Alsin Capital Management, Inc.
Post Office Box 7365
 Eugene, Oregon 97401-0015

________________________________________________________________________________
These  securities  have not been approved or  disapproved  by the Securities and
Exchange Commission or any state securities  commission,  nor has the Securities
and  Exchange  Commission  or any state  securities  commission  passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.                                                               
________________________________________________________________________________

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TABLE OF CONTENTS                                                               

                                                                          Page
                                                                          ----

THE FUND.......................................................................2
--------                                                                        

         INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGY................2
------------------------------------------------------        

         PRINCIPAL RISKS OF INVESTING IN THE FUND..............................3
----------------------------------------                      

         PERFORMANCE INFORMATION...............................................4
-----------------------                                       

         FEES AND EXPENSES OF THE FUND.........................................6
-----------------------------                                 

         OTHER INVESTMENT POLICIES.............................................7
-------------------------                                     

         DISCLOSURE OF PORTFOLIO HOLDINGS......................................7
--------------------------------                              

MANAGEMENT OF THE FUND.........................................................8
----------------------                                                          

         INVESTMENT ADVISER....................................................8
------------------                                            

         BOARD OF TRUSTEES.....................................................9
-----------------                                             

         ADMINISTRATOR.........................................................9
-------------                                                 

         TRANSFER AGENT........................................................9
--------------                                                

         DISTRIBUTOR...........................................................9
-----------                                                   

INVESTING IN THE FUND..........................................................9
---------------------                                                           

         MINIMUM INVESTMENT....................................................9
------------------                                            

         PURCHASE AND REDEMPTION PRICE.........................................9
-----------------------------                                 

         PURCHASING SHARES....................................................10
-----------------                                             

         REDEEMING  SHARES....................................................12
-----------------                                             

         FREQUENT PURCHASES AND REDEMPTIONS...................................14
----------------------------------                            

OTHER IMPORTANT INVESTMENT INFORMATION........................................15
--------------------------------------                                          

         DIVIDENDS, DISTRIBUTIONS, AND TAXES..................................15
-----------------------------------                           

         FINANCIAL HIGHLIGHTS.................................................15
--------------------                                          

         ADDITIONAL INFORMATION...............................................16
----------------------                                        

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THE FUND                                                                        
--------                                                                        

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGY                          
------------------------------------------------------                          

The Fund's investment  objective is to provide long-term growth of capital.  The
Fund's investment objective may be changed without shareholder approval.        

To achieve  its  objective,  the Fund  invests in common  stocks that the Fund's
investment adviser,  Alsin Capital Management,  Inc.  ("Adviser"),  believes are
"turnaround  companies." The Fund defines "turnaround companies" to be companies
that are or have  been  struggling  with one or more  business  issues,  such as
management  issues  (e.g.,  mismanagement  or management  changes),  operational
issues (e.g., product, services, or customer issues), or financial issues (e.g.,
balance sheet issues). The Fund seeks to invest in turnaround companies that the
Adviser believes present attractive investment opportunities. The Fund typically
invests in common stocks, although it may also invest in other equity securities
(e.g.,  preferred stocks,  convertible bonds,  convertible preferred stocks, and
warrants).                                                                      

To  select  equity  securities  for the  Fund,  the  Adviser  seeks to  identify
turnaround companies with one or more of the following characteristics:         

     |X|  Promising  business strategy to turn around the company (based on, for
          example,  a review by the Adviser of the  operational or other changes
to be implemented by the company);                          

     |X|  Positive  balance  sheet  characteristics,  such as high or increasing
          liquidity,   low  or  lowering   off-balance   sheet  liabilities  and
          contingent  liabilities,  or other balance sheet  characteristics that
          the Adviser  believes  indicate the  company's  ability to improve its
business prospects and circumstances;                       

     |X|  Positive (or projected  positive) revenue or profit trends,  including
          trends  resulting  or  anticipated  to result from changes in specific
products, services, or other operating segments; and        

     |X|  Companies  with,  or poised to assume,  competitive  positions  within
their respective industry.                                  

The Adviser then seeks to identify  turnaround  companies which have one or more
of the following characteristics:                                               

                                      ______________________________________
   |X|  Companies   with  a  high        "Intrinsic  value"  refers  to  the
        "intrinsic value";               value of the  underlying  business,
                                         not  to  the  value  of  the  stock
   |X|  Companies  with  specific        (market     capitalization).     In
        qualities  identified  by        determining  intrinsic  value,  the
        the Adviser  within their        Adviser   considers  the  following
operating  model that may        factors:                   
be used by the company to                                   
        enhance business value;          |X|      Substantial  discount from
                                                  a  price  at   which   the
   |X|  Companies    that   issue                 securities  of  comparable
        timely,   organized,  and                 businesses  have been sold
        detailed   financial  and                 in      arms'       length
        accounting presentations;                 transactions       between
                                                  parties   judged   to   be
   |X|  Companies    that    have                 competent businesspersons;
strong  management teams;                                   
        and                              |X|      Substantial   discount  to
                                                  the value of the  business
   |X|  Companies  with  policies                 determined  by  cash  flow
        (e.g.,       compensation                 analysis  and  qualitative
structures)  that  do not                 strengths; and/or 
appear  to  significantly                                   
        dilute      shareholders'        |X|      Substantial  discount from
        ownership.                                asset  value  based on the
                                                  total    value    of   the
                                                  company's individual parts
                                                  and   assets,   less   the
                                                  present   value   of   its
                                    liabilities.
                                        ________________________________________

The Fund typically invests in equity securities of U.S. companies,  but may also
invest  in  foreign   companies.   The  Fund  does  not  have  specific   market
capitalization  targets  for its  portfolio,  so the Fund may  invest  in small,
medium,  and/or  large  capitalization  stocks in the  portfolio at any point in
time. The Fund generally seeks to purchase securities for the long-term, seeking
to achieve long-term capital  appreciation as the marketplace realizes the value
of these companies over time. As a non-diversified  investment company, the Fund
has the flexibility to hold a small number of equity securities (e.g., as few as
12, even when fully invested).                                                  

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The Fund generally sells  securities when the Adviser  believes that they are no
longer undervalued,  or that they are unlikely to benefit from current business,
market, and economic  conditions.  The Fund may also sell equity securities when
the Adviser believes other opportunities are more attractive.                   

While the Fund's primary focus is investment in equity securities,  the Fund has
flexibility  to invest in other types of  securities  when the Adviser  believes
they  offer  more  attractive  opportunities.  Accordingly,  the  Fund  may hold
significant  positions in corporate,  and/or government bonds from time to time.
The Fund may also invest in  short-term  fixed  income  securities  such as U.S.
Government  obligations,  bank  certificates of deposit,  bankers'  acceptances,
commercial  paper,  and  repurchase  agreements.  The Fund may also purchase and
write put and call  options  on  securities.  In  addition,  the Fund may sell a
security  short (i.e.,  sell a security  borrowed  from a broker) if the Adviser
expects the market price for the  security to drop in the future.  When the Fund
makes a short sale of a security,  the Fund will have to replace the security in
the future,  whether or not the price  declines.  The Fund may hold up to 33% of
its net assets in short positions at any time.                                  

PRINCIPAL RISKS OF INVESTING IN THE FUND                                        
----------------------------------------                                        

An investment in the Fund is subject to investment risks, including the possible
loss of some or the entire principal amount invested.  There can be no assurance
that the Fund will be successful in meeting its investment objective. Generally,
the Fund will be subject to the following additional risks:                     

Market Risk:  Market risk refers to the risk that the value of securities in the
Fund's portfolio may decline due to daily fluctuations in the securities markets
generally.  The Fund's  performance  per share will  change  daily based on many
factors, including fluctuation in interest rates, the quality of the instruments
in  each  Fund's  investment  portfolio,  national  and  international  economic
conditions,  and general equity market conditions.  In a declining stock market,
stock prices for all companies  (including  those in the Fund's  portfolio)  may
decline, regardless of their long-term prospects.                               

Management Style Risk:  Different types of securities tend to shift into and out
of  favor  with  stock  market  investors   depending  on  market  and  economic
conditions.  Because the Fund invests in value  stocks  (stocks that the Adviser
believes  are  undervalued),  the Fund's  performance  may at times be better or
worse than the  performance  of stock  funds that focus on other  types of stock
strategies (e.g. growth stocks), or that have a broader investment style.       

Sector Risk:  Sector risk is the  possibility  that  securities  within the same
group of  industries  will  decline  in price due to  sector-specific  market or
economic developments.  If the Fund invests more heavily in a particular sector,
the value of its shares may be  especially  sensitive  to factors  and  economic
risks that specifically  affect that sector. As a result, the Fund's share price
may fluctuate more widely than the value of shares of a mutual fund that invests
in a broader range of industries. Additionally, some sectors could be subject to
greater  government  regulation  than  other  sectors.  Therefore,   changes  in
regulatory policies for those sectors may have a material effect on the value of
securities  issued by companies in those sectors.  The sectors in which the Fund
may invest more heavily will vary.                                              

Small Company Risk:  Stocks of smaller  companies may have more risks than those
of larger  companies.  In  general,  smaller  companies  have  less  experienced
management  teams,  serve smaller markets,  and find it more difficult to obtain
financing  for growth or potential  development  than larger  companies.  Due to
these and other  factors,  small  companies  may be more  susceptible  to market
downturns, and their stock prices may be more volatile.                         

Portfolio Turnover Risk:  Portfolio turnover is a ratio that indicates how often
the securities in a mutual fund's portfolio change during a year's time.  Higher
numbers  indicate a greater  number of  changes,  and lower  numbers  indicate a
smaller number of changes.                                                      

The Fund may sell portfolio securities without regard to the length of time they
have been held in order to take  advantage of new  investment  opportunities  or
changing  market  conditions.   Since  portfolio  turnover  may  involve  paying
brokerage  commissions and other  transaction  costs,  there could be additional

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expenses for the Fund. High rates of portfolio  turnover could lower performance
of the Fund due to increased  costs and may result in short-term  capital gains.
If the Fund realizes capital gains when it sells its portfolio  investments,  it
must generally distribute those gains to shareholders,  increasing their taxable
distributions.  Under normal  circumstances,  the anticipated portfolio turnover
rate for the Fund is expected to be less than 100%.                             

Non-Diversified  Fund Risk:  In  general,  a  non-diversified  fund may invest a
greater  percentage  of its  assets  in a  particular  issue  and may own  fewer
securities than other mutual funds.  Many mutual funds elect to be "diversified"
funds  that,  as to 75% of their  assets,  cannot  invest  more than 5% of their
assets in any one  security at any given  time.  A  non-diversified  fund is not
subject to this limitation, so it may hold a smaller number of securities than a
diversified  fund.  When  a  non-diversified   fund  holds  a  small  number  of
securities,  it is subject to the risk that a large loss in an individual  issue
will cause a greater  loss for the fund than it would if the fund were  required
to hold a larger number of securities.  Even a non-diversified  fund has to have
some diversification for tax purposes.  In order to deduct dividends distributed
to  shareholders  under the tax code,  mutual funds are required,  at the end of
each quarter of the taxable  year,  to have (i) at least 50% of the market value
of the Fund's total assets invested in cash,  U.S.  Government  securities,  the
securities  of other  regulated  investment  companies,  and  other  securities,
limited  with  respect  to any  one  issuer  limited  for the  purposes  of this
calculation  to an amount not greater  than 5% of the value of the Fund's  total
assets,  and (ii) not more than 25% of the value of its total assets invested in
the securities of any one issuer (other than U.S.  Government  securities or the
securities of other regulated investment companies).                            

Options  Risk:  The Fund may trade in options in order to hedge  against  market
shifts as well as to increase  returns.  Investments  in options carry risks not
otherwise  associated  with direct  investment in the securities  underlying the
options. If the Fund does not correctly anticipate market movements or is unable
to close an option position due to conditions in the market, the Fund could lose
money.  Funds that use options to protect their  investments  or increase  their
income take a risk that the prices of securities  subject to the options may not
correlate with the prices of the other securities in the Fund's portfolio. These
investments may also cause the Fund to experience higher losses than a fund that
does not trade in options.  In addition,  investments in options have the effect
of  creating  leverage  and,  as a result,  may cause  the Fund to  increase  or
decrease  in value more  quickly  than  would an  investment  in the  underlying
securities.                                                                     

Short Sales Risk:  The Fund may establish a short position in a stock by selling
borrowed  shares of the  stock.  Borrowed  shares  must be repaid  (i.e.,  short
positions must be "covered") whether or not the stock's price declines. When the
price of any stock that the Fund has sold short  rises  above the price at which
the Fund borrowed and sold the stock, the Fund may lose money on the short sale.
Accordingly,  the Fund is  likely to lose  value on its short  sales in a rising
market. In addition, the Fund will maintain a separate brokerage account for its
short sales.  If the Fund's short  account  falls below the 150% asset  coverage
required by the rules of the  Securities and Exchange  Commission  ("SEC") or if
the broker from whom the stock was  borrowed  for a position  requires  that the
stock be repaid,  then the Fund could be forced to cover short positions earlier
than the Fund otherwise  would.  If the Fund does not have the assets to cover a
short  sale,  then the Fund's  potential  losses on the short will be  unlimited
because the security's price may appreciate indefinitely.                       

PERFORMANCE INFORMATION                                                         
-----------------------                                                         

The bar chart shown below  provides an  indication  of the risks of investing in
the Fund by showing (on a calendar year basis) changes in the Fund's performance
from year to year. The Fund's past  performance is not necessarily an indication
of how the Fund will perform in the future.                                     

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Calendar Year Returns 
--------------------- 

2004 - 10.48% 
2005 - -7.63% 
2006 -  2.36% 

     o    During the three-year period shown in the bar chart above, the highest
          return for a calendar  quarter was 15.35%  (quarter ended December 31,
2004).                                                      

     o    During the three-year  period shown in the bar chart above, the lowest
          return for a calendar quarter was (9.15)% (quarter ended September 30,
2006).                                                      

     o    The  calendar  year-to-date  return  as of the  most  recent  calendar
quarter was 3.89% (quarter ended March 31, 2007).           

The table shown below  provides an  indication  of the risks of investing in the
Fund by showing how the Fund's  average  annual  total  returns for one year and
since  inception  compare to those of a  broad-based  securities  market  index.
After-tax returns are calculated using the historical highest individual federal
marginal  income  tax rates  and do not  reflect  the  impact of state and local
taxes.  Actual  after-tax  returns depend on an investor's tax situation and may
differ from those shown and are not applicable to investors who hold Fund shares
through tax-deferred arrangements such as an individual retirement account (IRA)
or 401(k)  plan.  The Fund's past  performance  (before and after  taxes) is not
necessarily an indication of how the Fund will perform in the future.           

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                                                        [Enlarge/Download Table]
                                                                                                
---------------------------------------------------- --------------------- ---------------------
        Average Annual Total Returns                        Past 1                Since         
      Periods Ended December 31, 2006                        Year               Inception*      
---------------------------------------------------- --------------------- ---------------------
The Turnaround Fund                                                                             
   Before taxes                                             2.36%                 10.58%        
   After taxes on distributions                             2.20%                  9.78%        
   After taxes on distributions and sale of shares          1.75%                  8.97%        
---------------------------------------------------- --------------------- ---------------------
S&P 500 Total Return Index **                              15.80%                 16.21%        
---------------------------------------------------- --------------------- ---------------------

*  April 9, 2003 (commencement of operations of the Fund)             

   ** The S&P 500 Total  Return  Index is the  Standard  & Poor's  Composite
      Index of 500  stocks  and is a widely  recognized  unmanaged  index of
      common stock prices.  This index does not have an  investment  adviser
      and does not pay any  commissions,  expenses,  or taxes. If this index
   did pay commissions, expenses, or taxes its returns would be lower.

FEES AND EXPENSES OF THE FUND                                                   
-----------------------------                                                   

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the Fund:                                                             

Shareholder Fees
 (fees paid directly from your investment)
 -----------------------------------------

Maximum Sales Charge (Load) Imposed On Purchases                      
 (as a percentage of offering price) .......................None
Redemption Fee (as a % of amount redeemed).....................2.00%^1

Annual Fund Operating Expenses
 (expenses that are deducted from Fund assets)
 ---------------------------------------------

Management Fees .............................................. 1.00%  
Distribution and/or Service (12b-1) Fees ..................... 0.00%  
Other Expenses ............................................... 2.14%^2
                                                             -----
Total Annual Fund Operating Expenses ......................... 3.14%^3
        Fee Waivers and/or Expense Reimbursements............(1.39%)
                                                             -----
       Net Expenses..........................................1.75%
                                                             =====

^1 The redemption  fee ("Redemption Fee") is charged upon any redemption of Fund
   shares  occurring  within 30 days following the issuance of such shares.  For
   example,  a  redemption  fee would apply if a share was issued on January 1st
   and redeemed on the following  January 31st, but would not apply if issued on
   January 1st and redeemed on the following February 1st. The Redemption Fee is
   not a fee to finance sales or sales  promotion  expenses,  but is paid to the
   Fund to defray the costs of  liquidating  a  shareholder's  investment in the
   Fund and to discourage  short-term trading of Fund shares. The Redemption Fee
   does not apply to shares  purchased by reinvesting  dividends or capital gain
   distributions,  shares  exchanged  for  shares of other  funds of the  Trust,
   amounts  representing  capital  appreciation of shares,  certain  redemptions
   pursuant to a systematic  withdrawal plan, certain  redemptions upon death or
   permanent  disability of the shareholder,  or mandatory  distributions from a
   tax-deferred  retirement  plan or IRA.  See the section  entitled  "Redeeming
   Shares  - Fees on  Redemptions"  for  additional  information  regarding  the
applicability of the Redemption Fee.                                      

^2 "Other Expenses" are based  upon actual expenses incurred by the Fund for the
   fiscal year ended February 28, 2007 and include expenses incurred  indirectly
   as a result of  investments  in other  investment  companies and other pooled
   investment  vehicles  ("Acquired Fund Fees and  Expenses").  For this period,
Acquired Fund Fees and Expenses were less than 0.01%.                     

^3 "Total  Annual Fund  Operating  Expenses"  are  based  upon  actual  expenses
   incurred by the Fund for the fiscal year ended February 28, 2007. The Adviser
   has entered  into a  contractual  agreement  with the Fund under which it has
   agreed to waive or reduce its fees and to assume other  expenses of the Fund,
   if necessary, in an amount that limits "Total Annual Fund Operating Expenses"
   (exclusive of interest, taxes, brokerage fees and commissions,  extraordinary
   expenses,  and  payments,  if any,  under a Rule 12b-1 Plan) to not more than
   1.75% of the average  daily net assets of the Fund for the fiscal year ending
   February  29,  2008.  It is  expected  that the  contractual  agreement  will
   continue from year-to-year provided such continuance is approved by the Board
   of Trustees of the Fund. See the "Management of the Fund - Expense Limitation
Agreement" section below for more detailed information.                   

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Example:  This  example  shows  you the  expenses  that you may pay over time by
investing  in the  shares  of the  Fund.  Since  all  mutual  funds use the same
hypothetical  conditions,  this  example  should  help you  compare the costs of
investing  in the Fund versus  other  mutual  funds.  This  example  assumes the
following conditions:                                                           

(1)  You invest $10,000 in the Fund for the periods shown;            
(2)  You reinvest all dividends and distributions;                    
(3)  You redeem all of your shares at the end of those periods;       
(4)  You earn a 5% total return; and                                  
(5)  The Fund's operating expenses remain the same.                   

Although your actual costs may be higher or lower, the following table shows you
what your costs may be under the conditions listed above.                       

                                                        [Enlarge/Download Table]
                                                                                                                    
---------------------------- --------------------- --------------------- --------------------- ---------------------
      Period Invested               1 Year               3 Years               5 Years               10 Years       
---------------------------- --------------------- --------------------- --------------------- ---------------------
        Your Costs                   $178                  $838                 $1,524                $3,352        
---------------------------- --------------------- --------------------- --------------------- ---------------------

OTHER INVESTMENT POLICIES                                                       
-------------------------                                                       

As a  temporary  defensive  measure in  response  to adverse  market,  economic,
political, or other conditions, the Adviser may from time to time determine that
market conditions warrant investing in  investment-grade  bonds, U.S. government
securities,  repurchase agreements,  money market instruments, and to the extent
permitted by applicable law and the Fund's  investment  restrictions,  shares of
other investment companies. Under such circumstances,  the Adviser may invest up
to 100% of the Fund's assets in these  investments.  To the extent that the Fund
invests in money market funds or other investment companies, shareholders of the
Fund would indirectly pay both the Fund's expenses and the expenses  relating to
those other  investment  companies with respect to the Fund's assets invested in
such  investment  companies.  To the extent the Fund is invested  in  short-term
investments,  it  will  not be  pursuing  and  may not  achieve  its  investment
objective.  Under normal  circumstances,  however, the Fund will also hold money
market or repurchase  agreement  instruments for funds awaiting  investment,  to
accumulate cash for anticipated purchases of portfolio securities,  to allow for
shareholder redemptions, and to provide for Fund operating expenses.            

DISCLOSURE OF PORTFOLIO HOLDINGS                                                
--------------------------------                                                

The Fund and/or  Adviser may, from time to time,  provide  additional  portfolio
holdings  information  including  lists  of the  ten  largest  holdings  and the
complete  portfolio  holdings as of the end of each calendar  quarter.  The Fund
will generally make this  information  available to the public on its website at
http://www.theturnaroundfund.com  within 15 days after the close of the calendar
quarter and such information will remain available until new information for the
next calendar quarter is posted.  To reach this  information,  click on the link
corresponding to the Top Ten Holdings section.  The Fund may also send a portion
or all of this  information  to  shareholders  of the  Fund and to  mutual  fund
analysts and rating and trading  entities;  provided that the Fund will not send
this  information  to  shareholders  of the Fund or  analysts  or rating  and/or
trading  entities  until  one day  after  such  information  has  been  publicly
disclosed  on the Fund's  website.  A  description  of the Fund's  policies  and
procedures with respect to the disclosure of the Fund's portfolio  securities is
available in the Fund's Statement of Additional Information ("SAI").            

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MANAGEMENT OF THE FUND                                                          
----------------------                                                          

INVESTMENT ADVISER                                                              
------------------                                                              

The Fund's investment adviser is Alsin Capital Management, Inc., Post Office Box
7365, Eugene, Oregon 97401-0015. The Adviser serves in that capacity pursuant to
an  investment  advisory  contract  "Advisory  Agreement"  with  the  Turnaround
Investment  Trust  ("Trust") on behalf of the Fund.  Subject to the authority of
the Board of Trustees of the Trust  ("Trustees"),  the Adviser provides guidance
and policy  direction  in  connection  with its daily  management  of the Fund's
assets.  The Adviser is also  responsible  for the  selection of  broker-dealers
through which the Fund executes portfolio transactions, subject to the brokerage
policies  established by the Trustees,  and provides certain executive personnel
to the Fund.                                                                    

The Adviser is controlled by Arne Torsten  Alsin.  Mr. Alsin is the President of
the Adviser and has served in that capacity  since founding the Adviser in 1990.
Mr.  Alsin also served as  portfolio  manager for the Adviser  from 1990 through
1998, and resumed portfolio management for the Adviser in 2000. In addition, Mr.
Alsin serves as a member of the Board of Trustees that  oversees the  management
and  administration  of the Fund and as the principal  portfolio manager for the
Fund.  Mr. Alsin has worked in the  investment  management  business for over 18
years,  and  regularly   contributes  to  the  publications   TheStreet.com  and
RealMoney. Prior to founding the Adviser, Mr. Alsin worked for the international
accounting  firm  of KPMG  Peat  Marwick.  Mr.  Alsin  received  his  Doctor  of
Jurisprudence degree from the University of Oregon School of Law in 1984 and his
undergraduate degree from Seattle Pacific University in 1981.                   

Glenn David Surowiec is the Fund's co-portfolio  manager. Mr. Surowiec serves as
a portfolio  manager for the Adviser and has served in that capacity since 2001.
Mr. Surowiec  received a MBA with honors from Southern  Methodist  University in
1999 and an undergraduate degree in Accounting from Gettysburg College in 1993. 

The Fund's SAI provides  additional  information  about the portfolio  managers'
compensation,  other  accounts  managed  by  the  portfolio  managers,  and  the
portfolio managers' ownership of securities in the Fund.                        

The Adviser's  Compensation.  As full  compensation for the investment  advisory
services provided to the Fund, the Adviser receives monthly  compensation  based
on the Fund's  average daily net assets at the annual rate of 1.00%.  During the
Fund's last fiscal year,  the fiscal year ended  February 28, 2007,  the Adviser
waived all of its fees in the amount of $79,630 and  reimbursed  expenses in the
amount of $30,731  pursuant  to the  Expense  Limitation  Agreement  (as defined
below).                                                                         

Expense Limitation Agreement. The Adviser has entered into an expense limitation
agreement with the Trust ("Expense Limitation Agreement"), pursuant to which the
Adviser  has agreed to waive or limit its fees and to assume  other  expenses so
that the total  annual  operating  expenses of the Fund  (other  than  interest,
taxes,  brokerage  commissions,  other  expenditures  which are  capitalized  in
accordance with generally accepted  accounting  principles,  other extraordinary
expenses  not  incurred  in the  ordinary  course of the  Fund's  business,  and
amounts,  if any, payable pursuant to a Rule 12b-1 Plan) are limited to 1.75% of
the average daily net assets of the Fund for the fiscal year ending February 29,
2008. It is expected that the Expense  Limitation  Agreement  will continue from
year-to-year provided such continuance is specifically approved by a majority of
the  Trustees  who (i) are not  "interested  persons"  of the Trust or any other
party to the Expense Limitation Agreement,  as defined in the Investment Company
Act of 1940,  as  amended  ("1940  Act"),  and (ii) have no  direct or  indirect
financial  interest in the operation of this Expense Limitation  Agreement.  The
Trust may terminate the Expense  Limitation  Agreement at any time.  The Adviser
may  also  terminate  the  Expense  Limitation  Agreement  at  the  end  of  the
then-current  term upon not less than 90 days'  notice to the Trust as set forth
in the Expense Limitation Agreement.                                            

Disclosure Regarding Approval of the Advisory Agreement.  A discussion regarding
the Trustees' basis for approving the renewal of the Fund's  Advisory  Agreement
is available in the Fund's  Semi-annual Report to shareholders for the six-month
period ended August 31, 2006, and when available,  in the Semi-annual report for
the  six-month  period  ending  August  31,  2007.  You may obtain a copy of the
Semi-annual Report, without charge, upon request to the Fund.                   

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BOARD OF TRUSTEES                                                               
-----------------                                                               

The Fund is a series of the Trust,  an open-end  management  investment  company
organized  as a Delaware  statutory  trust on December  27,  2002.  The Board of
Trustees  of the  Trust  supervises  the  operations  of the Fund  according  to
applicable state and federal law, and is responsible for the overall  management
of the Fund's business affairs.                                                 

ADMINISTRATOR                                                                   
-------------                                                                   

The Nottingham Company ("Administrator") assists the Trust in the performance of
its  administrative  responsibilities  to the Fund,  coordinates the services of
each vendor of the Fund, and provides the Fund with certain administrative, fund
accounting,  and  compliance  services.  In addition,  the  Administrator  makes
available the office space,  equipment,  personnel,  and facilities  required to
provide services to the Fund.                                                   

TRANSFER AGENT                                                                  
--------------                                                                  

NC  Shareholder  Services,  LLC  ("NCSS")  serves  as  the  transfer  agent  and
dividend-disbursing  agent of the Fund.  As indicated  later in this  Prospectus
under the  caption  "Investing  in the Fund,"  NCSS will  handle  your orders to
purchase and redeem shares of the Fund, and will disburse  dividends paid by the
Fund.                                                                           

DISTRIBUTOR                                                                     
-----------                                                                     

Capital Investment Group, Inc.  ("Distributor") is the principal underwriter and
distributor  of the Fund's shares and serves as the Fund's  exclusive  agent for
the  distribution  of the Fund's  shares.  The  Distributor  may sell the Fund's
shares to or through qualified securities dealers or other approved entities.   

Other  Expenses.  The Fund pays all expenses not assumed by the Fund's  Adviser,
including,  without  limitation:  the  fees  and  expenses  of  its  independent
accountants and legal counsel; the costs of printing and mailing to shareholders
annual and semi-annual reports,  proxy statements,  prospectuses,  statements of
additional   information,   and  supplements  thereto;  the  costs  of  printing
registration  statements;  bank  transaction  charges and custodian's  fees; any
proxy solicitors' fees and expenses;  filing fees; any federal,  state, or local
income or other taxes;  any  interest;  any  membership  fees of the  Investment
Company  Institute  and  similar  organizations;  fidelity  bond  and  Trustees'
liability  insurance  premiums;   and  any  extraordinary   expenses,   such  as
indemnification payments, damages awarded in litigation, or settlements made.   

INVESTING IN THE FUND                                                           
---------------------                                                           

MINIMUM INVESTMENT                                                              
------------------                                                              

The  Fund's  shares  are sold and  redeemed  at net asset  value.  Shares may be
purchased  by any account  managed by the  Adviser  and any other  institutional
investor or any broker-dealer authorized to sell shares in the Fund. The minimum
initial  investment  is $2,500  ($1,500  for IRAs)  and the  minimum  additional
investment  is $250 ($100 for those  participating  in an  automatic  investment
plan). The Fund may, at the Adviser's sole  discretion,  accept certain accounts
with less than the minimum investment.                                          

PURCHASE AND REDEMPTION PRICE                                                   
-----------------------------                                                   

Determining  the  Fund's Net Asset  Value.  The price at which you  purchase  or
redeem shares is based on the next calculation of net asset value after an order
is received,  subject to the order being  accepted by the Fund in good form.  An
order is considered to be in good form if it includes a complete application and
payment in full of the  purchase  amount.  A Fund's net asset value per share is
calculated  by dividing the value of the Fund's total assets,  less  liabilities
(including  Fund  expenses,  which are accrued  daily),  by the total  number of

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outstanding  shares of that Fund.  The net asset  value per share of the Fund is
normally  determined  at the time regular  trading  closes on the New York Stock
Exchange  ("NYSE"),  currently 4:00 p.m.  Eastern time,  Monday through  Friday,
except when the NYSE closes earlier. The Fund does not calculate net asset value
on business holidays when the NYSE is closed.                                   

The pricing and valuation of portfolio securities is determined in good faith in
accordance  with  procedures  established  by, and under the  direction  of, the
Trustees.  In  determining  the  value of the  Fund's  total  assets,  portfolio
securities  are  generally  calculated  at market value by  quotations  from the
primary market in which they are traded.  Instruments with maturities of 60 days
or less are valued at amortized cost, which approximates  market value. The Fund
normally  uses  third  party  pricing  services  to  obtain  market  quotations.
Securities and assets for which representative market quotations are not readily
available or which cannot be accurately  valued using the Fund's normal  pricing
procedures  are valued at fair value as determined in good faith under  policies
approved by the  Trustees.  Fair value  pricing  may be used,  for  example,  in
situations  where (i) a portfolio  security,  such as a small-cap  stock,  is so
thinly  traded  that  there  have been no  transactions  for that  stock over an
extended  period  of time or the  validity  of a market  quotation  received  is
questionable;  (ii) the exchange on which the portfolio  security is principally
traded closes early;  or (iii) trading of the particular  portfolio  security is
halted  during the day and does not resume  prior to the Fund's net asset  value
calculation.  Pursuant to policies adopted by the Trustees, the Adviser consults
with the  Administrator  on a regular  basis  regarding  the need for fair value
pricing.  The Adviser is responsible  for notifying the Trustees (or the Trust's
Fair Value Committee) when it believes that fair value pricing is required for a
particular  security.  The Fund's  policies  regarding  fair value  pricing  are
intended  to result in a  calculation  of the Fund's net asset value that fairly
reflects  portfolio  security  values  as of the time of  pricing.  A  portfolio
security's  "fair value" price may differ from the price next available for that
portfolio  security  using the Fund's normal  pricing  procedures,  and the fair
value price may differ  substantially  from the price at which the  security may
ultimately be traded or sold.  The Trustees  monitor and evaluate the Fund's use
of fair value pricing, and periodically review the results of any fair valuation
under the Fund's policies.                                                      

Other Matters. Purchases and redemptions of shares of the same class by the same
shareholder on the same day will be netted for the Fund. All redemption requests
will be processed and payment with respect  thereto will normally be made within
seven days after tender. The Fund may suspend  redemptions,  if permitted by the
1940 Act, for any period during which the NYSE is closed or during which trading
is  restricted  by the SEC or if the SEC  declares  that  an  emergency  exists.
Redemptions may also be suspended during other periods  permitted by the SEC for
the protection of the Fund's  shareholders.  During drastic  economic and market
changes, telephone redemption privileges may be difficult to implement.         

PURCHASING SHARES                                                               
-----------------                                                               

The Fund has  authorized  one or more brokers to accept  purchase and redemption
orders on its behalf and such brokers are authorized to designate intermediaries
to accept  orders on  behalf  of the  Fund.  Orders  will be deemed to have been
received by the Fund when an  authorized  broker or  broker-authorized  designee
receives  the order,  subject to the order  being  accepted  by the Fund in good
form. The orders will be priced at the next  calculation of the Fund's net asset
value after the authorized  broker or  broker-authorized  designee  receives the
orders.  Investors  may also be  charged  by a broker  or  agent if  shares  are
purchased through a broker or agent.                                            

Regular  Mail  Orders.  Payment  for  shares  must be made by check  from a U.S.
financial  institution  and payable in U.S.  dollars.  Cash,  money orders,  and
traveler's  checks will not be accepted by the Fund.  If checks are returned due
to  insufficient  funds or other  reasons,  the purchase  will be canceled.  The
prospective  investor  will  also be  responsible  for any  losses  or  expenses
incurred by the Fund,  Administrator,  or Transfer Agent. The Fund will charge a
$35 fee and may redeem  shares of the Fund  already  owned by the  purchaser  or
another  identically  registered account to recover any such losses. For regular
mail orders,  please complete a Fund Shares  Application and mail it, along with
your check made payable to "The Turnaround Fund", to:                           

The Turnaround Fund                     
c/o NC Shareholder Services             
116 South Franklin Street               
Post Office Box 4365                    
Rocky Mount, North Carolina  27803-0365 

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The  application  must contain your Social  Security  Number ("SSN") or Taxpayer
Identification  Number  ("TIN").  If you have applied for an SSN or TIN prior to
completing  your  account  application  but you have not  received  your number,
please  indicate this on the application and include a copy of the form applying
for the SSN or TIN. Taxes are not withheld from  distributions to U.S. investors
if certain IRS requirements regarding the SSN or TIN are met.                   

Bank Wire  Purchases.  Purchases  may also be made through bank wire orders.  To
establish a new account or add to an existing  account by wire,  please call the
Fund at  1-800-773-3863  for wire  instructions  and to  advise  the Fund of the
investment, dollar amount, and account identification number.                   

Additional Investments.  You may also add to your account by mail or wire at any
time by purchasing shares at the then current public offering price. The minimum
additional investment is $250. Before adding funds by bank wire, please call the
Fund at  1-800-773-3863  for wire  instructions  and to  advise  the Fund of the
investment, dollar amount, and account identification number. Mail orders should
include,  if possible,  the "Invest by Mail" stub attached to your  confirmation
statement. Otherwise, please identify your account in a letter accompanying your
purchase payment.                                                               

Automatic Investment Plan. The automatic investment plan enables shareholders to
make  regular  monthly or  quarterly  investments  in shares  through  automatic
charges to their  checking  account.  With  shareholder  authorization  and bank
approval,  the Fund will automatically charge the shareholder's checking account
for the amount specified ($100 minimum), which will be automatically invested in
shares at the public  offering price on or about the 21st day of the month.  The
shareholder  may change the amount of the investment or discontinue  the plan at
any time by writing to the Fund.                                                

Purchases In Kind.  You may, if the Fund approves,  purchase  shares of the Fund
with securities that are eligible for purchase by the Fund  (consistent with the
Fund's investment  restrictions,  policies, and goal) and that have a value that
is readily  ascertainable in accordance with the Fund's valuation  policies.  To
ascertain  whether your  securities will qualify to be accepted as a purchase in
kind for the Fund,  please contact the Adviser at  1-800-773-3863.  If accepted,
the  securities  will be valued using the same  criteria and methods for valuing
securities to compute the Fund's net asset value.                               

Stock  Certificates.  The Fund  normally  does  not  issue  stock  certificates.
Evidence of  ownership of shares is provided  through  entry in the Fund's share
registry.  Investors  will  receive  periodic  account  statements  (and,  where
applicable, purchase confirmations) that will show the number of shares owned.  

Important  Information  about  Procedures  for Opening a New Account.  Under the
Uniting and  Strengthening  America by Providing  Appropriate  Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act of 2001), the Fund
is required to obtain, verify, and record information to enable the Fund to form
a reasonable  belief as to the  identity of each  customer who opens an account.
Consequently,  when an  investor  opens an  account,  the Fund  will ask for the
investor's  name,  street  address,  date of birth (for an  individual),  social
security  or other tax  identification  number (or proof that the  investor  has
filed for such a  number),  and other  information  that will  allow the Fund to
identify  the  investor.  The Fund may also ask to see the  investor's  driver's
license or other identifying  documents.  An investor's account application will
not be considered  "complete" and, therefore,  an account will not be opened and
the investor's  money will not be invested until the Fund receives this required
information.  If after  opening the  investor's  account,  the Fund is unable to
verify the investor's  identity after reasonable  efforts,  as determined by the
Fund in its sole discretion,  the Fund may (i) restrict  redemptions and further
investments  until the  investor's  identity  is  verified;  and (ii)  close the
investor's account without notice and return the investor's  redemption proceeds
to the investor.  If the Fund closes an investor's  account because the Fund was
unable to verify the  investor's  identity,  the Fund will value the  account in
accordance with the Fund's next net asset value  calculated after the investor's
account is closed. In that case, the investor's redemption proceeds may be worth
more or less  than the  investor's  original  investment.  The Fund  will not be
responsible  for any losses  incurred due to the Fund's  inability to verify the
identity of any investor opening an account.                                    

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REDEEMING SHARES                                                                
----------------                                                                

Regular Mail Redemptions.  Regular mail redemption  requests should be addressed
to:                                                                             

The Turnaround Fund                 
c/o NC Shareholder Services         
116 South Franklin Street           
Post Office Box 4365                
   Rocky Mount, North Carolina  27803-0365

Regular mail redemption requests should include the following:                  

     (1)  Your letter of instruction  specifying the Fund,  account number,  and
          number of shares (or the dollar  amount) to be redeemed.  This request
          must be signed by all  registered  shareholders  in the exact names in
which they are registered;                                  

     (2)  Any required signature guarantees (see "Signature  Guarantees" below);
and                                                         

     (3)  Other supporting legal documents,  if required in the case of estates,
          trusts, guardianships, custodianships, corporations, pension or profit
sharing plans, and other entities.                          

Your  redemption  proceeds  normally will be sent to you within seven days after
receipt of your redemption  request.  The Fund may delay forwarding a redemption
check for  recently  purchased  shares  while the Fund  determines  whether  the
purchase payment will be honored.  Such delay (normally no more than 15 calendar
days) may be reduced or avoided if the  purchase is made by  certified  check or
wire transfer.  In all cases,  the net asset value next determined after receipt
of the request for redemption will be used in processing the redemption request.

Telephone  and Bank  Wire  Redemptions.  Unless  you  specifically  decline  the
telephone  transaction  privileges on your account  application,  you may redeem
shares of the Fund by  telephone.  You may also redeem shares by bank wire under
certain limited  conditions.  The Fund will redeem shares in this manner when so
requested  by the  shareholder  only  if  the  shareholder  confirms  redemption
instructions in writing, using the instructions above.                          

The Fund may rely upon  confirmation  of  redemption  requests  transmitted  via
facsimile (Fax No. 252-972-1908). The confirmation instructions must include the
following:                                                                      

(1)  Name of Fund;                                                    
(2)  Shareholder's(s') name and account number;                       
(3)  Number of shares or dollar amount to be redeemed;                
     (4)  Instructions   for   transmittal   of   redemption   proceeds  to  the
shareholder; and                                            
     (5)  Shareholder's(s') signature(s) as it/they appear(s) on the application
then on file with the Fund.                                 

Redemption  proceeds will not be distributed  until written  confirmation of the
redemption  request is received,  per the instructions  above. You can choose to
have redemption proceeds mailed to you at your address of record, your financial
institution,  or to any other  authorized  person,  or you can have the proceeds
sent by wire transfer to your financial institution ($5,000 minimum). Redemption
proceeds cannot be wired on days on which your financial institution is not open
for business.  You can change your redemption  instructions  anytime you wish by
filing a letter  including your new redemption  instructions  with the Fund. See
"Signature Guarantees" below.                                                   

The  Fund,  at  its  discretion,   may  choose  to  pass  through  to  redeeming
shareholders any charges imposed by the custodian for wire redemptions.  If this
cost is passed through to redeeming shareholders by the Fund, the charge will be
deducted  automatically  from  your  account  by  redemption  of  shares in your
account. Your bank or brokerage firm may also impose a charge for processing the
wire. If wire transfer of funds is impossible  or  impractical,  the  redemption
proceeds will be sent by mail to the designated account.                        

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You may redeem shares,  subject to the procedures outlined above, by calling the
Fund at 1-800-773-3863.  Redemption  proceeds will only be sent to the financial
institution account or person named in your Fund Shares Application currently on
file with the Fund. Telephone redemption privileges authorize the Fund to act on
telephone instructions from any person representing himself or herself to be the
investor and reasonably believed by the Fund to be genuine. The Fund will employ
reasonable procedures,  such as requiring a form of personal identification,  to
confirm  that  instructions  are  genuine.  The Fund will not be liable  for any
losses due either to fraudulent or unauthorized  instructions  nor for following
telephone instructions provided the Fund follows reasonable procedures to insure
instructions are genuine.                                                       

Systematic  Withdrawal Plan. A shareholder who owns shares of the Fund valued at
$2,500  or more  at the  current  offering  price  may  establish  a  systematic
withdrawal plan ("Systematic Withdrawal Plan") to receive a monthly or quarterly
check in a stated  amount  (not less  than  $100).  Each  month or  quarter,  as
specified,  the Fund  will  automatically  redeem  sufficient  shares  from your
account to meet the specified  withdrawal  amount. The shareholder may establish
this service whether dividends and distributions are reinvested in shares of the
Fund or paid in cash. Call or write the Fund for an application form.           

Fees on  Redemptions.  As  explained  under "Fees and Expenses of the Fund," the
Fund charges a Redemption Fee of 2.00% of the amount  redeemed on redemptions of
Fund shares occurring within 30 days following the issuance of such shares.  The
Redemption Fee is not a fee to finance sales or sales promotion expenses, but is
paid to the Fund to defray the costs of liquidating a  shareholder's  investment
in the Fund and to discourage  short-term  trading of Fund shares.  However,  no
Redemption Fee will be imposed in the following cases:                          

     o    Redemption of shares  purchased  through  reinvestment of dividends or
capital gains distributions;                                
o    Amounts representing capital appreciation of shares;             
     o    Redemptions pursuant to a Systematic  Withdrawal Plan, up to a maximum
          of 20% per year of a shareholder's account value based on the value of
          the account at the time the Systematic  Withdrawal Plan is established
         or modified, provided all dividends and distributions are reinvested;
o    Redemptions of shares to pay fund or account fees;               
     o    Redemption  of shares upon the death or  permanent  disability  of the
          shareholder.  This  exemption is available only for shares held at the
          time of death or initial  determination  of permanent  disability  and
          provided the Fund is notified of the  requested  exemption at the time
of the redemption request; or                               
     o    Mandatory  distributions  from a tax-deferred  retirement plan or IRA.
          This  exemption  is  available  only if the  Fund is  notified  of the
requested exemption at the time of the redemption request.  

In  determining   whether  a  Redemption  Fee  is  applicable  to  a  particular
redemption,  it is  assumed  that the  redemption  is first of  shares  acquired
pursuant to the reinvestment of dividends and capital gains  distributions,  and
next of shares held by the shareholder for the longest period of time. If shares
are held and subsequently  redeemed  through an omnibus  account,  the financial
intermediary  that  places  the  trade  with the Fund  will be  responsible  for
determining  the amount of the Redemption Fee for each  respective  sale of Fund
shares and for the collection of such fees, if any.                             

Minimum Account Size. The Trustees reserve the right to redeem involuntarily any
account  having a net  asset  value of less  than  $2,500  (due to  redemptions,
exchanges,  or  transfers,  and not due to market  action) upon  30-days'  prior
written notice.  If the shareholder  brings his account net asset value up to at
least  $2,500  during the  notice  period,  the  account  will not be  redeemed.
Redemptions from retirement accounts may be subject to federal income tax.      

Redemptions In Kind. The Fund does not intend,  under normal  circumstances,  to
redeem its shares by payment in kind. It is possible,  however,  that conditions
may arise in the future which  would,  in the opinion of the  Trustees,  make it
undesirable for the Fund to pay for all redemptions in cash. In such a case, the
Trustees  may  authorize  payment  to be made in  readily  marketable  portfolio
securities of the Fund.  Securities delivered in payment of redemptions would be
valued at the same  value  assigned  to them in  computing  the Fund's net asset
value per share.                                                                

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Signature Guarantees. To protect your account and the Fund from fraud, signature
guarantees  may be required to insure that you are the person who has authorized
a change in registration or standing  instructions  for your account.  Signature
guarantees are generally required for (i) change of registration requests;  (ii)
requests to establish or change  exchange  privileges or telephone and bank wire
redemption  service other than through your initial account  application;  (iii)
transactions  where proceeds from redemptions,  dividends,  or distributions are
sent to an  address  or  financial  institution  differing  from the  address or
financial  institution  of record;  and (iv)  redemption  requests  in excess of
$50,000.  Signature  guarantees are acceptable from a member bank of the Federal
Reserve System,  a savings and loan  institution,  a credit union (if authorized
under state law),  a registered  broker-dealer,  a  securities  exchange,  or an
association clearing agency and must appear on the written request for change of
registration,  establishment  or change in exchange  privileges,  or  redemption
request.                                                                        

Miscellaneous.  The Fund  reserves the right to (i) refuse to accept any request
to purchase  shares of the Fund for any  reason;  (ii)  suspend  any  redemption
request  involving  recently  purchased  shares until the check for the recently
purchased  shares has  cleared;  or (iii)  suspend its offering of shares at any
time .                                                                          

FREQUENT PURCHASES AND REDEMPTIONS                            
----------------------------------                            

Frequent  purchases and redemptions of shares of the Fund  ("Frequent  Trading")
may present a number of risks to other shareholders of the Fund. These risks may
include, among other things, dilution in the value of shares of the Fund held by
long-term  shareholders,  interference  with  the  efficient  management  by the
Adviser  of  the  Fund's  portfolio   holdings,   and  increased  brokerage  and
administration  costs.  Due to the  potential  of a thin  market  for the Fund's
portfolio securities, as well as overall adverse market, economic, political, or
other  conditions  affecting  the sale price of portfolio  securities,  the Fund
could face untimely  losses as a result of having to sell  portfolio  securities
prematurely to meet  redemptions.  Frequent Trading may also increase  portfolio
turnover,  which may result in increased capital gains taxes for shareholders of
the Fund.                                                                       

The Trustees  have adopted a policy that is intended to identify and  discourage
Frequent  Trading by  shareholders  of the Fund.  Under the Fund's  policy,  the
Adviser has the discretion to refuse to accept further  purchase and/or exchange
orders from an investor if the Adviser  believes  the  investor has a pattern of
Frequent  Trading that the Adviser  considers not to be in the best interests of
the other shareholders.  To assist the Adviser in identifying  possible Frequent
Trading  patterns,  the  Transfer  Agent  provides a daily  record of the Fund's
shareholder  trades to the Adviser.  The Transfer Agent also assists the Adviser
in  monitoring  and  testing  shareholder  purchase  and  redemption  orders for
possible incidents of Frequent Trading.                                         

Under the Fund's policy regarding  Frequent  Trading,  the Fund intends to limit
investments from investor accounts that purchase and redeem shares over a period
of less than ten days in which (i) the  redemption  amount is within ten percent
of the previous purchase  amount(s);  (ii) the redemption amount is greater than
$10,000;  and (iii) two or more such redemptions  occur during a 60 calendar day
period. In the event such a purchase and redemption  pattern occurs, an investor
account and any other account with the same taxpayer  identification number will
be precluded from investing in the Fund (including  investments that are part of
an  exchange  transaction)  for at least 30 calendar  days after the  redemption
transaction.  This policy is intended to apply  uniformly,  except that the Fund
may not be  able to  identify  or  determine  that a  specific  purchase  and/or
redemption is part of a pattern of Frequent Trading or that a specific  investor
is engaged in Frequent  Trading,  particularly with respect to transactions made
through accounts such as omnibus accounts or accounts opened through third-party
financial   intermediaries  such  as  broker-dealers  and  banks  ("Intermediary
Accounts").  Therefore,  this  policy is not  applied  to  omnibus  accounts  or
Intermediary Accounts. Omnibus account arrangements permit multiple investors to
aggregate their  respective share ownership  positions and to purchase,  redeem,
and  exchange  shares  of the  Fund  without  the  identity  of  the  particular
shareholders  being  known to the  Fund.  Like  omnibus  accounts,  Intermediary
Accounts normally permit investors to purchase,  redeem,  and exchange shares of
the Fund without the identity of the underlying  shareholder  being known to the
Fund.  Accordingly,  the  ability  of the Fund to monitor  and  detect  Frequent
Trading  through  omnibus  accounts  and  Intermediary  Accounts  would  be very
limited,  and  there  would  be  no  guarantee  that  the  Fund  could  identify
shareholders  who might be engaging in Frequent Trading through such accounts or
curtail such trading.  Also, the policy will not apply if the Adviser determines
that a  purchase  and  redemption  pattern  is not a  Frequent  Trading  pattern
intended to respond to short-term  fluctuations in the securities markets,  such
as  inadvertent  errors  that  result in  frequent  purchases  and  redemptions.
Inadvertent   errors   shall   include   purchases   and/or   redemptions   made
unintentionally  or by  mistake  (e.g.,  where an  investor  unintentionally  or

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mistakenly  invests in the Fund and redeems  immediately  after  recognizing the
error).  The investor shall have the burden of proving to the sole  satisfaction
of the Advisor that a frequent purchase and redemption pattern was the result of
an  inadvertent  error.  In such a case the Adviser may choose to accept further
purchase and/or exchange orders for such investor account. In addition, the Fund
may charge a Redemption Fee on redemptions  of Fund shares  occurring  within 30
days of the issuance of such shares.  The fee is intended to defray the costs of
liquidating  a  shareholder's  investment  in the  Fund  and to  discourage  the
short-term trading of Fund shares. See the section entitled  "Redeeming Shares -
Fees on Redemptions" for additional information on the Redemption Fee.          

OTHER IMPORTANT INVESTMENT INFORMATION                                          
--------------------------------------                                          

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              
----------------------------------                                              

The  following  information  is meant as a general  summary for U.S.  taxpayers.
Additional tax information appears in the SAI. Shareholders should rely on their
own tax advisers for advice about the particular  federal,  state, and local tax
consequences of investing in the Fund.                                          

The  Fund  will  distribute  most  of  its  income  and  realized  gains  to its
shareholders every year.  Dividends paid by the Fund derived from net investment
income, if any, will be paid quarterly, and capital gains distributions, if any,
will be made at least  annually.  Shareholders  may elect to take dividends from
net  investment  income  or  capital  gains  distributions,  if any,  in cash or
reinvest them in additional Fund shares.  Although the Fund will not be taxed on
amounts it distributes,  shareholders  will generally be taxed on distributions,
regardless  of  whether  distributions  are  paid  by the  Fund  in  cash or are
reinvested in additional Fund shares.  Distributions may be subject to state and
local taxes, as well as federal taxes.                                          

In general,  a  shareholder  who sells or redeems  shares will realize a capital
gain or  loss,  which  will be  long-term  or  short-term,  depending  upon  the
shareholder's  holding period for the Fund shares.  An exchange of shares may be
treated as a sale and any gain may be subject to tax.                           

As with all mutual  funds,  the Fund may be required to  withhold  U.S.  federal
income  tax  at the  fourth  lowest  rate  for  taxpayers  filing  as  unmarried
individuals  (presently 28% for 2007) for all taxable  distributions  payable to
shareholders   who  fail  to  provide  the  Fund  with  their  correct  taxpayer
identification  numbers  or to make  required  certifications,  or who have been
notified  by the IRS  that  they  are  subject  to  backup  withholding.  Backup
withholding  is not an  additional  tax;  rather,  it is a way in which  the IRS
ensures it will  collect  taxes  otherwise  due.  Any  amounts  withheld  may be
credited against a shareholder's U.S. federal income tax liability.             

Shareholders  should consult their own tax advisers to distributions and sale of
Fund shares are treated appropriately on their income tax returns.              

FINANCIAL HIGHLIGHTS                                                            
--------------------                                                            

The financial  highlights  table on the  following  page is intended to help you
understand the Fund's financial performance since inception of the Fund. Certain
information reflects financial results for a single Fund share. The total return
in the table represents the rate that an investor would have earned (or lost) on
an  investment  in  the  Fund  (assuming   reinvestment  of  all  dividends  and
distributions).  The  financial  data in the table for the  fiscal  years  ended
February 28, 2007 and  February 28, 2006 have been audited by Briggs,  Bunting &
Dougherty,  LLP, an independent registered public accounting firm, whose reports
covering such years are  incorporated  by reference  into the SAI. The financial
data in the tables for all other periods were audited by a different independent
registered  public   accounting  firm.  This  information   should  be  read  in
conjunction with the Fund's latest audited annual financial statements and notes
thereto,  which are also incorporated by reference into the SAI, a copy of which
may be obtained at no charge by calling the Fund. Further  information about the
performance of the Fund is contained in the Annual Report and Semi-annual Report
of the Fund,  copies of which may also be  obtained  at no charge by calling the
Fund at 1-800-773-3863.                                                         

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 THE TURNAROUND FUND
 (For a Share Outstanding Throughout the Period)

                                                        [Enlarge/Download Table]
                                                                                                                                    
============================================================== ================ ================= ================= ==============  
                                                                  Year ended       Year ended        Year ended       Period ended  
                                                                 February 28,     February 28,      February 28,      February 29,  
                                                                     2007             2006              2005            2004 (a)    
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
Net asset value, beginning of period                               $12.50            $14.84            $14.39           $10.00      
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
  Income (Loss) from investment operations                                                                                          
   Net investment (loss) income                                     (0.18)            (0.14)             0.11            (0.04)     
   Net realized and unrealized gain (loss) on investments            1.65             (0.80)             0.56             4.62      
    Total from investment operations                                 ----              ----              ----             ----      
                                                                     1.47             (0.94)             0.67             4.58      
                                                                     ----              ----              ----             ----      
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
  Distributions to shareholders and other:                                                                                          
   Dividends from net investment income                               --                --             (0.11)               --      
   Distribution in excess of net investment income                    --                --              0.00(b)             --      
   Distributions from capital gains                                 (0.14)            (1.40)            (0.11)           (0.19)     
                                                                     ----              ----              ----             ----      
   Redemption fees                                                   0.00 (b)            --                --               --      
    Total Distributions and other                                   (0.14)            (1.40)            (0.22)           (0.19)     
                                                                     ----              ----              ----             ----      
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
Net asset value, end of period                                     $13.83            $12.50            $14.84           $14.39      
                                                                   ======            ======            ======           ======      
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
Total return                                                        11.81%            (6.57)%            4.71%           45.90%     
                                                                   ======            ======            ======           ======      
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
Ratios/supplemental data                                                                                                            
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
  Net assets, end of period (in thousands)                         $7,538            $9,045           $13,592          $13,412      
  Average net assets for the period (in thousands)                 $7,963           $11,325           $13,568           $5,450      
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
  Ratio of gross expenses to average net assets (c)                  3.14%             2.52%             2.45%            4.42%  (d)
  Ratio of net expenses to average net assets (c)                    1.75%             1.75%             1.75%            1.75%  (d)
  Ratio of net investment (loss) income to average net assets       (1.25)%           (0.89)%            0.73%           (0.69)% (d)
-------------------------------------------------------------- ---------------- ----------------- ----------------- --------------  
  Portfolio turnover rate                                           73.67%           121.79%           108.24%           31.71%     
============================================================== ================ ================= ================= ==============  

(a)  For the period  beginning  April 9, 2003  (commencement  of  operations) to
February 29, 2004.                                                    
(b)  Actual amount is less than $0.01 per share.                                
(c)  The expense  ratios  reflect  total  expenses  prior to any fee waivers and
     reimbursements by service providers (gross expense ratio) and after any fee
waivers and  reimbursements by service  providers (net expense ratio).
(d)  Annualized.                                                                

ADDITIONAL INFORMATION                                                          
----------------------                                                          

Please  see the  back  cover  on how to  contact  the  Fund  and how to  receive
additional information regarding the Fund.                                      

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________________________________________________________________________________

 THE TURNAROUND FUND(TM)
________________________________________________________________________________

Additional  information  about the Fund is available in the Fund's SAI, which is
incorporated by reference into this prospectus. Additional information about the
Fund's  investments  is also  available  in the Fund's  Annual  and  Semi-annual
Reports to  shareholders.  The Fund's  Annual  Report  includes a discussion  of
market  conditions and investment  strategies  that  significantly  affected the
Fund's performance during its last fiscal year.                                 

The SAI and the Annual and Semi-annual Reports are available free of charge upon
request  (you  may  also  request  other  information  about  the  Fund  or make
shareholder inquiries) by contacting the Fund:                                  

By telephone:       1-800-773-3863                                              

By mail:            The Turnaround Fund                                         
c/o NC Shareholder Services             
116 South Franklin Street               
P.O. Box 4365                           
Rocky Mount, NC  27803                  

By e-mail:          info@nottinghamco.com                                       

On the Internet:    http://www.nottinghamco.com                                 

Information  about the Fund  (including the SAI) can also be reviewed and copied
at the  SEC's  Public  Reference  Room  in  Washington,  D.C.  Inquiries  on the
operations  of the  public  reference  room  may be made by  calling  the SEC at
1-202-942-8090.  Reports and other  information  about the Fund are available on
the EDGAR Database on the SEC's Internet site at http://www.sec.gov,  and copies
of this  information  may be  obtained,  upon payment of a  duplicating  fee, by
electronic  request at the following e-mail address:  publicinfo@sec.gov,  or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102.        

Investment Company Act file number 811-21275

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________________________________________________________________________________

 THE TURNAROUND FUND(TM)
________________________________________________________________________________

PROSPECTUS

 June 28, 2007

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 STATEMENT OF ADDITIONAL INFORMATION

 THE TURNAROUND FUND(TM)

 June 28, 2007

 A series of the
 TURNAROUND INVESTMENT TRUST
Post Office Box 7365
 Eugene, Oregon 97401-0015
Telephone 1-800-773-3863

 TABLE OF CONTENTS

                                                                            Page

OTHER INVESTMENT POLICIES......................................................2
INVESTMENT LIMITATIONS.........................................................9
PORTFOLIO TRANSACTIONS........................................................10
DESCRIPTION OF THE TRUST......................................................11
MANAGEMENT AND OTHER SERVICE PROVIDERS........................................12
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION ...............................18
SPECIAL SHAREHOLDER SERVICES..................................................20
DISCLOSURE OF PORTFOLIO HOLDINGS..............................................21
NET ASSET VALUE...............................................................22
ADDITIONAL TAX INFORMATION....................................................23
ADDITIONAL INFORMATION ON PERFORMANCE.........................................25
FINANCIAL STATEMENTS..........................................................27
APPENDIX A - DESCRIPTION OF RATINGS...........................................28
APPENDIX B - PROXY VOTING POLICIES............................................32

This  Statement  of  Additional  Information  ("SAI")  is  meant  to be  read in
conjunction with the Prospectus for The Turnaround Fund ("Fund"), dated the same
date as this SAI, and is  incorporated  by  reference  in its entirety  into the
Prospectus. Because this SAI is not itself a prospectus, no investment in shares
of the Fund should be made solely upon the information  contained herein. Copies
of the  Fund's  Prospectus,  Annual  Report,  and/or  Semi-annual  Report may be
obtained  at no charge by writing or  calling  the Fund at the  address or phone
number shown above.  Capitalized terms used but not defined herein have the same
meanings as in the Prospectus.                                                  

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 OTHER INVESTMENT POLICIES

The Turnaround  Investment Trust ("Trust") was organized on December 27, 2002 as
a Delaware  statutory  trust and is registered  with the Securities and Exchange
Commission ("SEC") as an open-end management  investment company. The Turnaround
Fund is a separate,  non-diversified series of the Trust. The following policies
supplement  the Fund's  investment  objective  and  policies as described in the
Prospectus  for the Fund.  Attached  to the SAI is  Appendix  A, which  contains
descriptions  of the rating  symbols used by Rating  Agencies for  securities in
which the Fund may invest.  The Fund changed its name from the "Turnaround Fund"
to "The Turnaround Fund" in April 2004.                                         

GENERAL  INVESTMENT  RISKS.  All  investments in securities and other  financial
instruments involve a risk of financial loss. No assurance can be given that the
Fund's investment program will be successful.  Investors should carefully review
the  descriptions  of the Fund's  investments  and their risks  described in the
Prospectus and this SAI.                                                        

EQUITY SECURITIES.  The equity portion of the Fund's portfolio will generally be
comprised  of common  stocks  traded on  domestic  securities  exchanges  or the
over-the-counter market. In addition to common stocks, the equity portion of the
Fund's  portfolio  may also  include  preferred  stocks,  convertible  preferred
stocks,  and convertible  bonds.  Prices of equity  securities in which the Fund
invests may  fluctuate in response to many factors,  including,  but not limited
to, the activities of the individual  companies whose  securities the Fund owns,
general market and economic  conditions,  interest rates, and specific  industry
changes.  Such price  fluctuations  subject  the Fund to  potential  losses.  In
addition,  regardless of any one  company's  particular  prospects,  a declining
stock  market may produce a decline in prices for all equity  securities,  which
could also result in losses for the Fund.  Market  declines  may continue for an
indefinite period of time, and investors should understand that during temporary
or extended bear markets, the value of equity securities will decline.          

INVESTMENT IN SMALL-CAP  COMPANIES.  The Fund may invest a portion of its assets
in securities of companies with small market capitalizations.  Certain small-cap
companies  may offer  greater  potential  for capital  appreciation  than larger
companies.  However,  investors  should  note that this  potential  for  greater
capital  appreciation is accompanied by a substantial  risk of loss and that, by
their very nature,  investments in small-cap  companies tend to be very volatile
and  speculative.  Small-cap  companies may have a small share of the market for
their products or services, their businesses may be limited to regional markets,
or they may provide goods and services for a limited market.  For example,  they
may be  developing  or marketing  new products or services for markets which are
not yet  established  or may never become  established.  In addition,  small-cap
companies  may have or will  develop  only a  regional  market for  products  or
services  and thus be  affected by local or regional  market  conditions.  Also,
small-cap  companies  may lack  depth of  management  or they may be  unable  to
generate funds necessary for growth or potential development,  either internally
or through  external  financing on favorable  terms.  Such companies may also be
insignificant in their industries and be subject to or become subject to intense
competition from larger  companies.  Due to these and other factors,  the Fund's
investments in small-cap companies may suffer significant losses. Further, there
is typically a smaller market for the securities of a small-cap company than for
securities of a large company. Therefore, investments in small-cap companies may
be less liquid and subject to  significant  price declines that result in losses
for the Fund.                                                                   

COMPANIES WITH UNUSUAL VALUATIONS BASED UPON MANY TRADITIONAL  METHODS. The Fund
may invest in securities of companies  whose market prices grow and very quickly
reflect unreasonable  valuations by traditional  valuation  techniques.  Many of
these types of companies  have a low level of revenues  relative to their market
capitalization, and many are not yet profitable.                                

Since the prices of the  securities of these  companies do not reflect the usual
relationships   between  price  and  corporate  revenues,   income  or  profits,
investments in these  securities are  accompanied by a substantial  risk of loss
because of their volatility and speculative  nature.  Numerous factors may cause
the prices of these securities to fall  precipitously,  which may cause the Fund
to  sustain  substantial  losses on any  investments  in such  companies.  These
factors include,  but are not limited to, market  participants  evaluating these
securities using more traditional  valuation  techniques,  investors taking less
interest  in these  securities,  a  general  downturn  in the  market  for these
securities,  or adverse changes in market participants'  expectations  regarding
the potential  markets,  revenues,  income,  or profitability for these types of
companies.                                                                      

FOREIGN  SECURITIES.  The Fund may invest directly in foreign equity  securities
traded on United States ("U.S.") national exchanges or  over-the-counter  and in
foreign securities  represented by American  Depository  Receipts  ("ADRs"),  as
described  below.  The Fund  may also  invest  in  foreign  currency-denominated
fixed-income  securities.  Investing in  securities  issued by  companies  whose
principal  business  activities  are  outside  the  United  States  may  involve
significant  risks not present in domestic  investments.  For example,  there is

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generally  less  publicly   available   information  about  foreign   companies,
particularly  those not subject to the disclosure and reporting  requirements of
the U.S.  securities  laws.  Foreign  issuers are generally not bound by uniform
accounting,  auditing,  and financial  reporting  requirements  and standards of
practice  comparable to those  applicable to domestic  issuers.  Investments  in
foreign  securities  also  involve  the  risk of  possible  adverse  changes  in
investment  or  exchange  control  regulations,  expropriation  or  confiscatory
taxation,  limitation  on the  removal  of cash or  other  assets  of the  Fund,
political or financial  instability,  or diplomatic and other developments which
could affect such  investments.  Further,  economies of particular  countries or
areas of the world may differ  favorably or unfavorably  from the economy of the
United  States.  Foreign  securities  often trade with less frequency and volume
than domestic  securities  and therefore may exhibit  greater price  volatility.
Additional costs associated with an investment in foreign securities may include
higher custodial fees than those applicable to domestic  custodial  arrangements
and transaction costs of foreign currency conversions.                          

ADRs  provide  a method  whereby  the Fund may  invest in  securities  issued by
companies  whose  principal  business  activities are outside the United States.
ADRs are receipts  typically  issued by a U.S. bank or trust company  evidencing
ownership  of the  underlying  securities,  and may be  issued as  sponsored  or
unsponsored  programs. In sponsored programs, an issuer has made arrangements to
have its  securities  trade in the form of ADRs. In  unsponsored  programs,  the
issuer may not be directly  involved in the  creation of the  program.  Although
regulatory  requirements with respect to sponsored and unsponsored  programs are
generally  similar,  in  some  cases  it  may  be  easier  to  obtain  financial
information  from an issuer that has participated in the creation of a sponsored
program.                                                                        

CONVERTIBLE  SECURITIES.  Although  the equity  investments  of the Fund consist
primarily  of  common  and  preferred  stocks,   the  Fund  may  buy  securities
convertible into common stock if, for example,  Alsin Capital Management,  Inc.,
the Fund's investment adviser ("Adviser"), believes that a company's convertible
securities are undervalued in the market.  Convertible  securities  eligible for
purchase by the Fund include  convertible bonds,  convertible  preferred stocks,
and warrants. A warrant is an instrument issued by a corporation which gives the
holder the right to subscribe to a specific amount of the corporation's  capital
stock at a set price for a specified  period of time.  Warrants do not represent
ownership  of the  securities,  but only the  right to buy the  securities.  The
prices of warrants do not necessarily  move parallel to the prices of underlying
securities.  Warrants may be considered  speculative in that they have no voting
rights,  pay no  dividends,  and have no rights with  respect to the assets of a
corporation  issuing them.  Warrant  positions  will not be used to increase the
leverage of the Fund; consequently,  warrant positions are generally accompanied
by cash positions equivalent to the required exercise amount. The Fund's ability
to invest in warrants may be limited by the Fund's investment restrictions.     

REAL  ESTATE  SECURITIES.  The Fund will not  invest in real  estate  (including
mortgage  loans and limited  partnership  interests),  but may invest in readily
marketable  securities  issued  by  companies  that  invest  in real  estate  or
interests therein.  The Fund may also invest in readily marketable  interests in
real estate investment trusts ("REITs").  REITs are generally publicly traded on
the national stock exchanges and in the over-the-counter market and have varying
degrees of liquidity. Investments in real estate securities are subject to risks
inherent  in the real  estate  market,  including  risks  related  to changes in
interest rates.                                                                 

CORPORATE AND  MUNICIPAL  DEBT  SECURITIES.  The Fund may invest in fixed income
investments,   including   corporate,   municipal,   or  other  government  debt
securities.  Corporate and municipal debt obligations  purchased by the Fund may
be any  credit  quality,  maturity,  or  yield.  Accordingly,  the  Fund's  debt
securities may include  "investment  grade" securities (those rated at least Baa
by Moody's Investors Service, Inc. ("Moody's"), BBB by Standard & Poor's Ratings
Services ("S&P") or Fitch Investors Service,  Inc. ("Fitch"),  or, if not rated,
of equivalent quality in the Adviser's  opinion).  In addition,  the Fund's debt
securities  may  include   lower-rated   debt  securities   including,   without
limitation,  junk bonds.  Debt obligations rated Baa by Moody's or BBB by S&P or
Fitch may be considered  speculative  and are subject to risks of non-payment of
interest  and  principal.  Debt  obligations  rated lower than Baa by Moody's or
lower than BBB by S&P or Fitch are generally considered  speculative and subject
to significant  risks of non-payment of interest and principal.  Descriptions of
the quality ratings of Moody's,  S&P, and Fitch are contained in this SAI. While
the Adviser utilizes the ratings of various credit rating services as one factor
in establishing  creditworthiness,  it relies primarily upon its own analysis of
factors establishing creditworthiness.                                          

MONEY  MARKET  INSTRUMENTS.  The Fund may  invest  in money  market  instruments
including U.S. Government  obligations or corporate debt obligations  (including
those  subject to  repurchase  agreements),  provided that they are eligible for
purchase  by the  Fund.  Money  market  instruments  also may  include  Banker's

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Acceptances  and  Certificates  of Deposit  ("CD") of domestic  branches of U.S.
banks,  Commercial  Paper,  and Variable  Amount  Demand  Master Notes  ("Master
Notes"). Banker's Acceptances are time drafts drawn on and "accepted" by a bank.
When a bank "accepts" such a time draft,  it assumes  liability for its payment.
When the Fund acquires a Banker's Acceptance,  the bank that "accepted" the time
draft is liable for payment of interest  and  principal  when due.  The Banker's
Acceptance carries the full faith and credit of such bank. A CD is an unsecured,
interest  bearing debt obligation of a bank.  Commercial  Paper is an unsecured,
short-term debt obligation of a bank, corporation, or other borrower. Commercial
Paper generally matures in a range from two to 270 days and is usually sold on a
discounted basis rather than as an  interest-bearing  instrument.  The Fund will
invest  in  Commercial  Paper  only if it is rated in one of the top two  rating
categories by Moody's, S&P, or Fitch, or, if not rated, of equivalent quality in
the Adviser's  opinion.  Commercial  Paper may include  Master Notes of the same
quality. Master Notes are unsecured obligations which are redeemable upon demand
of the holder and which permit the investment of fluctuating  amounts at varying
rates of  interest.  Master  Notes will be acquired by the Fund only through the
Master  Note  program  of the Fund's  custodian  bank,  acting as  administrator
thereof.  The Adviser will monitor,  on a continuous  basis, the earnings power,
cash flow, and other liquidity ratios of the issuer of a Master Note held by the
Fund.                                                                           

FUNDING AGREEMENTS.  The Fund may invest in various types of funding agreements.
A funding agreement is, in substance,  an obligation of indebtedness  negotiated
privately between an investor and an insurance company. Funding agreements often
have maturity-shortening features, such as an unconditional put, that permit the
investor to require the insurance  company to return the principal amount of the
funding agreement, together with accrued interest, within one year or less. Most
funding  agreements are not  transferable  by the investor and,  therefore,  are
illiquid,  except to the extent  the  funding  agreement  is subject to a demand
feature of seven days or less.  An  insurance  company may be subject to special
protection under state insurance laws, which  protections may impair the ability
of the investor to require prompt  performance  by the insurance  company of its
payment obligations under the funding agreement.                                

US GOVERNMENT  SECURITIES.  The Fund may invest in U.S.  Government  securities,
defined to be U.S.  Government  obligations  such as U.S.  Treasury notes,  U.S.
Treasury  bonds,  and U.S.  Treasury bills,  obligations  guaranteed by the U.S.
Government  such  as  Government  National  Mortgage  Association,  as  well  as
obligations of U.S. Government authorities, agencies, and instrumentalities such
as  Federal   National   Mortgage   Association,   Federal  Home  Loan  Mortgage
Corporation,  Federal Housing Administration,  Federal Farm Credit Bank, Federal
Home Loan Bank,  Student Loan Marketing  Association,  and The Tennessee  Valley
Authority. U.S. Government securities may also be acquired subject to repurchase
agreements.  While obligations of some U.S.  Government  sponsored  entities are
supported by the full faith and credit of the U.S.  Government,  others are not.
No  assurance  can be given  that the U.S.  Government  will  provide  financial
support to U.S. Government agencies or instrumentalities  that are not supported
by the full faith and credit of the U.S.  government,  since it is not obligated
to do so by law.  The  guarantee of the U.S.  Government  does not extend to the
yield or value of the Fund's shares.                                            

REPURCHASE  AGREEMENTS.   The  Fund  may  invest  in  repurchase  agreements.  A
repurchase  agreement is a short term investment in which the purchaser acquires
ownership of a U.S.  Government security and the seller agrees to repurchase the
security at a future time at a set price,  thereby  determining the yield during
the  purchaser's  holding period.  Any repurchase  transaction in which the Fund
engages will require full  collateralization  of the seller's  obligation during
the entire term of the  repurchase  agreement.  In the event of a bankruptcy  or
other  default  of  the  seller,  the  Fund  could  experience  both  delays  in
liquidating the underlying security and losses in value.                        

REVERSE  REPURCHASE  AGREEMENTS.  The  Fund may also be  involved  with  reverse
repurchase  agreements.  Reverse repurchase agreements are repurchase agreements
in which the Fund is the seller (rather than the buyer) of the  securities,  and
agrees to repurchase them at an agreed upon time and price. A reverse repurchase
agreement may be viewed as a type of borrowing by the Fund.  Reverse  repurchase
agreements  are  subject  to  credit  risks.  In  addition,  reverse  repurchase
agreements create leverage risks because the Fund must repurchase the underlying
security at a higher  price,  regardless  of the market value of the security at
the time of repurchase.                                                         

ILLIQUID  INVESTMENTS.  The  Fund  may  invest  up to 15% of its net  assets  in
illiquid securities, which are investments that cannot be sold or disposed of in
the ordinary course of business within seven days at approximately the prices at
which they are  valued.  Under the  supervision  of the Board of Trustees of the
Trust  ("Trustees"),   the  Adviser  determines  the  liquidity  of  the  Fund's
investments,  and  through  reports  from  the  Adviser,  the  Trustees  monitor
investments in illiquid instruments.  In determining the liquidity of the Fund's
investments,  the  Adviser  may  consider  various  factors  including  (i)  the
frequency of trades and  quotations;  (ii) the number of dealers and prospective
purchasers in the marketplace;  (iii) dealer undertakings to make a market; (iv)
the nature of the security  (including any demand or tender  features);  and (v)
the nature of the  marketplace  for trades  (including  the ability to assign or
offset the Fund's rights and obligations relating to the investment). If through

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a change in values,  net assets,  or other  circumstances,  more than 15% of the
Fund's net assets were invested in illiquid  securities,  the Fund would seek to
take appropriate steps to protect liquidity.  Investment in illiquid  securities
poses  risks of  potential  delays  in  resale  and  uncertainty  in  valuation.
Limitations  on  resale  may have an  adverse  effect  on the  marketability  of
portfolio  securities  and  the  Fund  may be  unable  to  dispose  of  illiquid
securities promptly or at reasonable prices.                                    

RESTRICTED   SECURITIES.   Within  its  limitation  on  investment  in  illiquid
securities,  the Fund may purchase  restricted  securities that generally can be
sold  in  privately  negotiated  transactions,  pursuant  to an  exemption  from
registration  under the  federal  securities  laws,  or in a  registered  public
offering.  Where registration is required,  the Fund may be obligated to pay all
or part of the registration expense and a considerable period may elapse between
the time it decides to seek  registration and the time the Fund may be permitted
to sell a security under an effective registration  statement.  If during such a
period adverse market  conditions were to develop,  the Fund might obtain a less
favorable  price than  prevailed  when it decided  to seek  registration  of the
security.                                                                       

OPTIONS. The Fund may purchase and write put and call options on securities. The
Fund may write a call or put option only if the option is  "covered" by the Fund
holding a position in the  underlying  securities  or by other means which would
permit immediate  satisfaction of the Fund's obligation as writer of the option.
The purchase and writing of options  involves  certain risks.  During the option
period,  the  covered  call writer has, in return for the premium on the option,
given up the  opportunity  to profit  from a price  increase  in the  underlying
securities above the exercise price,  but, as long as its obligation as a writer
continues,  has  retained  the risk of loss  should the price of the  underlying
security  decline.  The writer of an option has no control over the time when it
may be  required to fulfill its  obligation  as a writer of the option.  Once an
option  writer has  received  an  exercise  notice,  it cannot  effect a closing
purchase  transaction in order to terminate its obligation  under the option and
must deliver the underlying  securities at the exercise  price. If a put or call
option purchased by the Fund is not sold when it has remaining value, and if the
market price of the underlying security,  in the case of a put, remains equal to
or greater than the exercise price or, in the case of a call,  remains less than
or equal to the exercise price, the Fund will lose its entire  investment in the
option.  Also, where a put or call option on a particular  security is purchased
to hedge against price movements in a related security,  the price of the put or
call option may move more or less than the price of the related security.  There
can be no assurance that a liquid market will exist when the Fund seeks to close
out an option position.  Furthermore, if trading restrictions or suspensions are
imposed on the options market, the Fund may be unable to close out a position.  

FUTURES CONTRACTS.  A futures contract is a bilateral agreement to buy or sell a
security (or deliver a cash settlement price, in the case of a contract relating
to an index or otherwise not calling for physical delivery at the end of trading
in  the  contracts)  for a set  price  in  the  future.  Futures  contracts  are
designated by boards of trade which have been designated  "contracts markets" by
the Commodities Futures Trading Commission  ("CFTC").  No purchase price is paid
or received when the contract is entered into. Instead,  the Fund, upon entering
into a futures  contract  (and to maintain the Fund's open  positions in futures
contracts),  would be required to deposit  with its  custodian  in a  segregated
account in the name of the  futures  broker an amount of cash,  U.S.  government
securities,  suitable  money  market  instruments,  or liquid,  high-grade  debt
securities,  known as "initial  margin."  The margin  required  for a particular
futures contract is set by the exchange on which the contract is traded, and may
be  significantly  modified from time to time by the exchange during the term of
the contract.  Futures  contracts are  customarily  purchased and sold on margin
that may range  upward  from less  than 5% of the  value of the  contract  being
traded.  By using futures  contracts as a risk management  technique,  given the
greater  liquidity  in the  futures  market than in the cash  market,  it may be
possible to accomplish  certain results more quickly and with lower  transaction
costs.                                                                          

If the price of an open futures  contract  changes (by increase in the case of a
sale or by decrease  in the case of a purchase)  so that the loss on the futures
contract  reaches a point at which the margin on deposit does not satisfy margin
requirements, the broker will require an increase in the margin. However, if the
value of a position  increases because of favorable price changes in the futures
contract so that the margin deposit exceeds the required margin, the broker will
pay the  excess  to the  Fund.  These  subsequent  payments,  called  "variation
margin," to and from the futures broker,  are made on a daily basis as the price
of the underlying assets  fluctuate,  making the long and short positions in the
futures  contract  more or less  valuable,  a process  known as  "marking to the
market." The Fund expects to earn  interest  income on its initial and variation
margin deposits.                                                                

The  Fund  will  incur  brokerage  fees  when it  purchases  and  sells  futures
contracts.  Positions  taken in the futures  markets are not normally held until
delivery or cash  settlement  is required,  but are instead  liquidated  through
offsetting  transactions  which may  result in a gain or a loss.  While  futures
positions taken by the Fund will usually be liquidated in this manner,  the Fund

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may instead make or take delivery of underlying  securities  whenever it appears
economically  advantageous  for  the  Fund  to do so.  A  clearing  organization
associated with the exchange on which futures are traded assumes  responsibility
for closing out transactions and guarantees that as between the clearing members
of an exchange,  the sale and purchase obligations will be performed with regard
to all positions that remain open at the termination of the contract.           

Securities  Index  Futures  Contracts.  Purchases or sales of  securities  index
futures  contracts  may be used in an attempt to protect  the Fund's  current or
intended  investments from broad fluctuations in securities prices. A securities
index futures contract does not require the physical delivery of securities, but
merely  provides  for profits and losses  resulting  from  changes in the market
value of the contract to be credited or debited at the close of each trading day
to the  respective  accounts of the parties to the contract.  On the  contract's
expiration  date, a final cash settlement  occurs and the futures  positions are
simply  closed out.  Changes in the market value of a particular  index  futures
contract  reflect  changes in the  specified  index of  securities  on which the
future is based.                                                                

By establishing an appropriate  "short" position in index futures,  the Fund may
also seek to protect the value of its  portfolio  against an overall  decline in
the market for such  securities.  Alternatively,  in anticipation of a generally
rising  market,  the Fund can seek to avoid losing the benefit of apparently low
current prices by establishing a "long" position in securities index futures and
later  liquidating that position as particular  securities are in fact acquired.
To the extent that these hedging  strategies  are  successful,  the Fund will be
affected to a lesser degree by adverse overall market price movements than would
otherwise be the case.                                                          

Options on Futures Contracts. The Fund may purchase exchange-traded call and put
options on futures contracts and write  exchange-traded  call options on futures
contracts. These options are traded on exchanges that are licensed and regulated
by the CFTC for the  purpose  of  options  trading.  A call  option on a futures
contract  gives the  purchaser  the right,  in return for the premium  paid,  to
purchase a futures contract  (assume a "long" position) at a specified  exercise
price at any time before the option  expires.  A put option gives the  purchaser
the right, in return for the premium paid, to sell a futures  contract (assume a
"short" position),  for a specified exercise price at any time before the option
expires.                                                                        

The Fund will write options only on futures  contracts  that are  "covered." The
Fund will be  considered  "covered"  with respect to a put option it has written
if, so long as it is obligated as a writer of the put, the Fund  segregates with
its custodian  cash, U.S.  government  securities,  or liquid  securities at all
times equal to or greater than the aggregate  exercise  price of the puts it has
written (less any related margin  deposited with the futures  broker).  The Fund
will be considered  "covered"  with respect to a call option it has written on a
debt security future if, so long as it is obligated as a writer of the call, the
Fund owns a security  deliverable under the futures  contract.  The Fund will be
considered  "covered"  with  respect  to a  call  option  it  has  written  on a
securities  index future if the Fund owns  securities the price changes of which
are, in the opinion of the  Adviser,  expected to  replicate  substantially  the
movement of the index upon which the futures contract is based.                 

Upon the  exercise of a call  option,  the writer of the option is  obligated to
sell the futures contract (to deliver a "long" position to the option holder) at
the option  exercise  price,  which will  presumably  be lower than the  current
market price of the contract in the futures market.  Upon exercise of a put, the
writer of the option is obligated to purchase  the futures  contract  (deliver a
"short" position to the option holder) at the option exercise price,  which will
presumably  be higher  than the  current  market  price of the  contract  in the
futures  market.  When the holder of an option  exercises  it and assumes a long
futures  position,  in the case of a call, or a short futures  position,  in the
case of a put, its gain will be credited to its futures  margin  account,  while
its loss will be  debited to its  account  and must be  immediately  paid by the
writer.  However,  as with the  trading of  futures,  most  participants  in the
options  markets do not seek to realize  their  gains or losses by  exercise  of
their option  rights.  Instead,  the holder of an option will usually  realize a
gain or loss by buying or selling an  offsetting  option at a market  price that
will reflect an increase or a decrease from the premium originally paid.        

If the Fund writes options on futures contracts, the Fund will receive a premium
but will  assume  a risk of  adverse  movement  in the  price of the  underlying
futures contract  comparable to that involved in holding a futures position.  If
the option is not  exercised,  the Fund will realize a gain in the amount of the
premium,  which  may  partially  offset  unfavorable  changes  in the  value  of
securities  held in or to be acquired for the Fund.  If the option is exercised,
the Fund will incur a loss in the option  transaction,  which will be reduced by
the amount of the premium it has  received,  but which will offset any favorable
changes in the value of its portfolio securities or, in the case of a put, lower
prices of securities it intends to acquire.                                     

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Options on futures contracts can be used by the Fund to hedge  substantially the
same  risks  as  might  be  addressed  by the  direct  purchase  or  sale of the
underlying  futures  contracts.  If the Fund  purchases  an  option on a futures
contract,  it may obtain benefits  similar to those that would result if it held
the futures  position  itself.  Purchases  of options on futures  contracts  may
present  less  risk in  hedging  than the  purchase  and sale of the  underlying
futures  contracts  since the  potential  loss is  limited  to the amount of the
premium plus related transaction costs.                                         

The  purchase  of put  options  on futures  contracts  may be used as a means of
hedging the Fund's  portfolio  against a general  decline in market prices.  The
purchase of a call option on a futures contract may represent a means of hedging
the  Fund's  portfolio  against  a market  advance  when  the Fund is not  fully
invested.                                                                       

The writing of a call option on a futures  contract  constitutes a partial hedge
against declining prices of the underlying  securities.  If the futures price at
expiration is below the exercise price,  the Fund will retain the full amount of
the option premium,  which provides a partial hedge against any decline that may
have occurred in the value of the Fund's holdings of securities.  The writing of
a put option on a futures  contract is  analogous  to the  purchase of a futures
contract in that it hedges  against an increase in the price of  securities  the
Fund intends to acquire.  However, the hedge is limited to the amount of premium
received for writing the put.                                                   

Limitations  on Purchase  and Sale of Futures  Contracts  and Options on Futures
Contracts.  Options and futures can be volatile  instruments and involve certain
risks. If the Adviser applies a hedge at an inappropriate  time or judges market
movements  incorrectly,  options  and  futures  strategies  may lower the Fund's
return.  The Fund could also experience  losses if the prices of its options and
futures  positions were poorly correlated with its other  investments,  or if it
could not close out its position  because of an illiquid  market.  The Fund will
not  engage in  transactions  in  futures  contracts  and  related  options  for
speculation.  In addition,  the Fund will not purchase or sell futures contracts
or related  options unless either (i) the futures  contracts or options  thereon
are  purchased  for "bona fide  hedging"  purposes  (as  defined  under the CFTC
regulations) or (ii) if purchased for other purposes,  the sum of the amounts of
initial margin deposits on the Fund's existing futures and premiums  required to
establish  non-hedging  positions,  less the  amount by which  any such  options
positions  are  "in-the-money"  (as defined  under CFTC  regulations)  would not
exceed 5% of the  liquidation  value of the Fund's  total  assets.  In instances
involving  the  purchase  of futures  contracts  or the  writing of put  options
thereon by the Fund, an amount of cash and cash  equivalents,  equal to the cost
of such futures contracts or options written (less any related margin deposits),
will be deposited in a segregated  account with its custodian,  thereby insuring
that the use of such futures contracts and options is unleveraged.  In instances
involving the sale of futures  contracts or the writing of call options  thereon
by the Fund, the securities underlying such futures contracts or options will at
all times be maintained by the Fund or, in the case of index futures and related
options,  the Fund will own  securities  the price  changes of which are, in the
opinion of the Adviser,  expected to replicate substantially the movement of the
index upon which the futures contract or option is based.                       

FORWARD COMMITMENT & WHEN-ISSUED SECURITIES. The Fund may purchase securities on
a  when-issued  basis  or for  settlement  at a future  date if the  Fund  holds
sufficient assets to meet the purchase price. In such purchase transactions, the
Fund will not  accrue  interest  on the  purchased  security  until  the  actual
settlement.  Similarly,  if a security is sold for a forward date, the Fund will
accrue the  interest  until the  settlement  of the sale.  When-issued  security
purchases and forward commitments have a higher degree of risk of price movement
before  settlement  due to the extended  time period  between the  execution and
settlement  of  the  purchase  or  sale.  As  a  result,  the  exposure  to  the
counterparty  of the  purchase  or sale is  increased.  Although  the Fund would
generally purchase  securities on a forward commitment or when-issued basis with
the intention of taking delivery, the Fund may sell such a security prior to the
settlement date if the Adviser felt such action was appropriate. In such a case,
the Fund could incur a short-term gain or loss.                                 

SHORT SALES OF SECURITIES.  The Fund may make short sales in an amount up to 33%
of total Fund assets,  which are transactions in which the Fund sells a security
it does  not own in  anticipation  of a  decline  in the  market  value  of that
security.  To  complete  a short  sale  transaction,  the Fund will  borrow  the
security from a broker-dealer, which generally involves the payment of a premium
and transaction  costs. The Fund then sells the borrowed  security to a buyer in
the market.  The Fund will then cover the short position by buying shares in the
market either (i) at its  discretion;  or (ii) when called by the  broker-dealer
lender.  Until  the  security  is  replaced,  the  Fund is  required  to pay the
broker-dealer  lender any dividends or interest that accrue during the period of
the loan.  In  addition,  the net proceeds of the short sale will be retained by
the broker to the extent  necessary to meet  regulatory  or other  requirements,
until the short  position is closed out.  The Fund will incur a loss as a result
of the short sale if the  security  increases  in price  between the date of the
short sale and the date on which the Fund  replaces the borrowed  security.  The
Fund will realize a gain if the security  declines in price between those dates.

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The amount of any gain will be decreased,  and the amount of any loss increased,
by the amount of the premium,  dividends,  interest, or expenses the Fund may be
required to pay in  connection  with a short  sale.  When the Fund makes a short
sale,  the Fund will  segregate  liquid  assets (such as cash,  U.S.  Government
securities,  or equity  securities)  on the Fund's  books and/or in a segregated
account at the Fund's  custodian  in an amount  sufficient  to cover the current
value of the  securities  to be  replaced  as well as any  dividends,  interest,
and/or  transaction  costs due to the  broker-dealer  lender. In determining the
amount to be segregated,  any  securities  that have been sold short by the Fund
will be marked to market  daily.  To the extent the market price of the security
sold short  increases and more assets are required to meet the Fund's short sale
obligations, additional assets will be segregated to ensure adequate coverage of
the Fund's short position  obligations.  If the Fund does not have the assets to
cover a short  sale,  then the  Fund's  potential  losses on the  short  will be
unlimited because the security's price may appreciate indefinitely.             

In addition,  the Fund may make short sales  "against the box",  i.e.,  the Fund
sells a security  short and has  segregated  securities  equivalent  in kind and
amount to the securities  sold short (or securities  convertible or exchangeable
into such  securities)  and will hold such  securities  while the short  sale is
outstanding.  The Fund will incur  transaction  costs,  including  interest,  in
connection with opening, maintaining, and closing short sales against the box.  

LENDING OF PORTFOLIO  SECURITIES.  In order to generate  additional  income, the
Fund may lend  portfolio  securities in an amount up to 33% of total Fund assets
to  broker-dealers,  major banks,  or other  recognized  domestic  institutional
borrowers of securities which the Adviser has determined are creditworthy  under
guidelines  established by the Trustees.  In  determining  whether the Fund will
lend securities, the Adviser will consider all relevant facts and circumstances.
The Fund may not lend  securities  to any company  affiliated  with the Adviser.
Each loan of securities will be collateralized by cash,  securities,  or letters
of credit.  The Fund might  experience  a loss if the  borrower  defaults on the
loan.                                                                           

The  borrower at all times during the loan must  maintain  with the Fund cash or
cash  equivalent  collateral,  or provide to the Fund an  irrevocable  letter of
credit  equal in value to at least 100% of the value of the  securities  loaned.
While the loan is outstanding,  the borrower will pay the Fund any interest paid
on the loaned  securities,  and the Fund may invest the cash  collateral to earn
additional income. Alternatively,  the Fund may receive an agreed-upon amount of
interest income from the borrower who has delivered  equivalent  collateral or a
letter of credit.  It is  anticipated  that the Fund may share with the borrower
some of the income  received on the  collateral for the loan or the Fund will be
paid a premium for the loan.  Loans are subject to  termination at the option of
the Fund or the borrower at any time. The Fund may pay reasonable administrative
and custodial fees in connection  with a loan, and may pay a negotiated  portion
of the income  earned on the cash to the  borrower  or placing  broker.  As with
other extensions of credit, there are risks of delay in recovery or even loss of
rights in the collateral should the borrower fail financially.                  

Where voting rights with respect to the loaned  securities pass with the lending
of the  securities,  the Adviser  intends to call the loaned  securities to vote
proxies,  or to use other  practicable and legally  enforceable  means to obtain
voting rights,  when the Adviser has knowledge that, in its opinion,  a material
event  affecting  the  loaned  securities  will occur or the  Adviser  otherwise
believes it necessary to vote.                                                  

LACK OF DIVERSIFICATION. The Fund is a non-diversified Fund, which means that it
has not made an election to be a "diversified" investment company under the 1940
Act. Most mutual funds elect to be "diversified"  funds that, as to 75% of their
assets,  cannot  invest more than 5% of their  assets in any one security at any
given time. A non-diversified fund is not subject to this limitation,  and so it
can hold a  relatively  small  number of  securities  in its  portfolio.  Even a
non-diversified  fund has to have some  diversification for tax purposes.  Under
the tax code,  all mutual  funds are  required at the end of each quarter of the
taxable  year to have (i) at least 50% of the market  value of the Fund's  total
assets invested in cash,  U.S.  Government  securities,  the securities of other
regulated investment  companies,  and other securities,  limited with respect to
any one issuer for the  purposes  of this  calculation  to an amount not greater
than 5% of the value of the Fund's total  assets;  and (ii) not more than 25% of
the value of its total  assets  invested  in the  securities  of any one  issuer
(other than U.S.  Government  securities or the  securities  of other  regulated
investment companies).                                                          

Subject  to  the  requirements  of  the  tax  code  and  the  Fund's  investment
restrictions (see description below under "Investment  Restrictions"),  the Fund
may make  significant  investments  in the  securities  of a particular  issuer,
select  companies  in a  particular  industry,  or select  companies in a sector
within a particular  industry.  Such a concentration of Fund investments exposes
the Fund to additional risks and greater  potential for significant  share price
fluctuation. The Fund may or may not have a diversified portfolio of investments
at any given time, and may have large amounts of assets invested in a very small
number of companies,  industries,  or securities.  Such lack of  diversification

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substantially  increases  market risks and the risk of loss  associated  with an
investment  in the Fund,  because the value of each security will have a greater
impact on the Fund's performance and the value of each shareholder's investment.
When the value of a security  in a  non-diversified  fund  falls,  it may have a
greater impact on the fund than it would have had in a diversified fund.        

TEMPORARY DEFENSIVE  POSITIONS.  The Fund may, from time to time, take temporary
defensive  positions that are inconsistent with the Fund's principal  investment
strategies in an attempt to respond to adverse market,  economic,  political, or
other conditions. During such an unusual set of circumstances, the Fund may hold
up to 100% of its portfolio in cash or cash equivalent  positions  (e.g.,  money
market securities, U.S. Government securities,  and/or similar securities). When
the  Fund  takes a  temporary  defensive  position,  the Fund may not be able to
achieve its investment objective.                                               

BORROWING.  The Fund may,  subject to the  restrictions  of the 1940 Act, borrow
money from banks as a temporary measure.  For example, the Fund may borrow money
to meet redemption requests or for extraordinary or emergency  purposes.  In the
event the Fund should ever borrow money under these  conditions,  such borrowing
could increase the Fund's costs and thus reduce the value of the Fund's assets. 

INVESTMENT LIMITATIONS

The Fund has adopted  the  following  investment  limitations,  which  cannot be
changed  without  approval  by holders of a majority of the  outstanding  voting
shares of the Fund. A "majority" for this purpose means the lesser of (i) 67% of
the Fund's  outstanding shares represented in person or by proxy at a meeting at
which more than 50% of its outstanding shares are represented; or (ii) more than
50%  of  its  outstanding  shares.   Unless  otherwise   indicated,   percentage
limitations apply at the time of purchase of the applicable securities.         

FUNDAMENTAL RESTRICTIONS.  As a matter of fundamental policy, the Fund may not: 

(1)  Purchase  securities  on margin  (but the Fund may obtain  such  short-term
credits as may be necessary for the clearance of transactions);       

(2)  Issue senior securities, except as permitted by the 1940 Act;              

(3)  Borrow money, except to the extent permitted under the 1940 Act (including,
     without  limitation,  borrowing to meet redemptions).  For purposes of this
     investment restriction,  the entry into options, forward contracts, futures
     contracts,  including  those  relating to  indices,  and options on futures
contracts or indices shall not constitute borrowing;                  

(4)  Pledge, mortgage, or hypothecate its assets, except to the extent necessary
     to secure permitted  borrowings and to the extent related to the deposit of
     assets in escrow in  connection  with writing  covered put and call options
     and the purchase of securities on a when-issued or forward commitment basis
     and collateral and initial or variation margin arrangements with respect to
     options, forward contracts, futures contracts,  including those relating to
indices, and options on futures contracts or indices;                 

(5)  Act as  underwriter  except to the  extent  that,  in  connection  with the
     disposition  of  portfolio  securities,  the  Fund may be  deemed  to be an
underwriter under certain federal securities laws;                    

(6)  Make investments for the purpose of exercising control or management over a
portfolio company;                                                    

(7)  Invest in securities of other registered  investment  companies,  except as
permitted under the 1940 Act;                                         

(8)  Make loans,  provided that the Fund may lend its portfolio securities in an
     amount up to 33% of total Fund  assets,  and  provided  further  that,  for
     purposes  of  this  restriction,   investment  in  Government  obligations,
     short-term commercial paper, certificates of deposit, bankers' acceptances,
   and repurchase agreements shall not be deemed to be the making of a loan;

(9)  Purchase  or sell  real  estate  or  interests  in real  estate;  provided,
     however,  that the Fund may purchase and sell securities  which are secured
     by real estate and  securities  of  companies  which invest or deal in real
     estate   (including,   without   limitation,   investments   in  REITs  and
mortgage-backed securities); or                                       

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(10) Invest in commodities,  except that the Fund may purchase and sell options,
     forward contracts, futures contracts,  including those relating to indices,
and options on futures contracts or indices.                          

NON-FUNDAMENTAL  RESTRICTIONS.  The  following  investment  limitations  are not
fundamental  and may be changed  without  shareholder  approval.  As a matter of
non-fundamental policy, the Fund may not:                                       

(1)  Invest  in  interests  in  oil,  gas,  or  other  mineral   exploration  or
     development  programs,  although the Fund may invest in the common stock of
companies which invest in or sponsor such programs;                   

(2)  Purchase  warrants  if as a result the Fund would then have more than 5% of
     its total net assets (taken at the lower of cost or current value) invested
in warrants; or                                                       

(3)  Invest more than 25% of its total  assets in  securities  of issuers in any
     particular  industry.  For purposes of this  limitation,  securities of the
     U.S.  Government  (including  its  agencies  and   instrumentalities)   and
     securities  of  state  or  municipal   governments   and  their   political
  subdivisions are not considered to be issued by members of any industry.

With respect to the "fundamental" and "non-fundamental"  investment restrictions
above,  if a percentage  limitation is adhered to at the time of  investment,  a
later  increase or decrease in percentage  resulting from any change in value or
net assets will not result in a violation of such restriction (i.e.,  percentage
limitations  are  determined  at the time of  purchase),  except that the Fund's
level of  borrowing  must not  exceed  33.33% of net assets at all times even if
caused by market fluctuation.                                                   

PORTFOLIO TRANSACTIONS

Subject to the general  supervision of the Trustees,  the Adviser is responsible
for,  makes  decisions  with respect to, and places orders for all purchases and
sales of portfolio  securities for the Fund. The Adviser shall manage the Fund's
portfolio in accordance with the terms of the Investment  Advisory  Agreement by
and  between  the  Adviser  and the Fund (the  "Advisory  Agreement"),  which is
described in detail under  "Management and Other Service  Providers - Investment
Adviser."  The  Adviser  serves  as  investment  adviser  for a number of client
accounts,  including  the Fund.  Investment  decisions for the Fund will be made
independently  from those for any other series of the Trust, if any, and for any
other investment companies and accounts advised or managed by the Adviser.      

BROKERAGE  SELECTION.  The Fund has  adopted,  and the Trustees  have  approved,
policies  and  procedures  relating to the  direction  of mutual fund  portfolio
securities  transactions  to brokers.  In  accordance  with these  policies  and
procedures,  in  selecting  brokers to be used in  portfolio  transactions,  the
Adviser's  general guiding principle is to obtain the best overall execution for
each trade,  which is a  combination  of price and  execution.  With  respect to
execution,  the  Adviser  considers  a number  of  factors,  including,  without
limitation,  the  actual  handling  of the order,  the  ability of the broker to
settle the trade promptly and accurately,  the financial standing of the broker,
the  ability  of the  broker to  position  stock to  facilitate  execution,  the
Adviser's past  experience  with similar  trades,  and other factors that may be
unique to a particular order. Recognizing the value of these judgmental factors,
the Adviser may select brokers who charge a brokerage  commission that is higher
than the lowest  commission  that might  otherwise  be  available  for any given
trade. The Adviser may not give  consideration to sales of shares of the Fund as
a factor in selecting  brokers to execute  portfolio  transactions.  The Adviser
may, however, place portfolio transactions with brokers that promote or sell the
Fund's  shares  so long as such  transactions  are done in  accordance  with the
policies and procedures  established by the Trustees that are designed to ensure
that the selection is based on the quality of the broker's  execution and not on
the broker's sales efforts.                                                     

Under  Section  28(e) of the  Securities  Exchange  Act of 1934 and the Advisory
Agreement,  the Adviser is authorized to pay a brokerage commission in excess of
that which another broker might have charged for effecting the same transaction,
in recognition of the value of brokerage  and/or research  services  provided by
the  broker.  The  research  received  by  the  Adviser  may  include,   without
limitation:  information  on the  United  States'  and  other  world  economies;
information on specific industries, groups of securities,  individual companies,
political and other relevant news  developments  affecting  markets and specific
securities;  technical and quantitative  information about markets;  analysis of
proxy proposals affecting specific companies; accounting and performance systems
that allow the Adviser to determine and track  investment  results;  and trading
systems that allow the Adviser to interface electronically with brokerage firms,
custodians,  and other  providers.  Research  is received in the form of written
reports,  telephone  contacts,  personal meetings,  research seminars,  software
programs, and access to computer databases. In some instances, research products
or  services  received  by the  Adviser  may  also be used  by the  Adviser  for
functions  that are not  research  related  (i.e.  not  related to the making of
investment decisions).  Where a research product or service has a mixed use, the

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Adviser will make a reasonable  allocation according to its use and will pay for
the non-research function in cash using its own funds.                          

The research and investment  information services described above make available
to the Adviser for its analysis and  consideration  the views and information of
individuals and research staffs of other securities firms. These services may be
useful to the Adviser in connection  with  advisory  clients other than the Fund
and not all such  services may be useful to the Adviser in  connection  with the
Fund.  Although such information may be a useful supplement to the Adviser's own
investment  information  in  rendering  services to the Fund,  the value of such
research and services is not expected to  materially  reduce the expenses of the
Adviser in the performance of its services under the Advisory Agreement and will
not reduce the management fees payable to the Adviser by the Fund.              

The Fund may invest in  securities  traded in the  over-the-counter  market.  In
these cases, the Fund may initiate trades through brokers on an agency basis and
pay a commission in connection  with the  transaction.  The Fund may also effect
these transactions by dealing directly with the dealers who make a market in the
securities involved,  in which case the costs of such transactions would involve
dealer spreads rather than brokerage commissions.                               

For the fiscal year ended February 28, 2007, the Fund paid brokerage commissions
of $ 14,499.00 ; none of which was paid to the Distributor.  For the fiscal year
ended February 28, 2006, the Fund paid brokerage commissions of $20,028; none of
which was paid to the Distributor.  For the fiscal year ended February 28, 2005,
the Fund paid brokerage  commissions  of $26,040;  none of which was paid to the
Distributor.  For the  fiscal  year  ended  February  29,  2004,  the Fund  paid
brokerage commissions of $6,977; none of which was paid to the Distributor.  The
increase in  brokerage  commission  for the fiscal year ended  February 28, 2005
from  the  prior  fiscal  year was  primarily  due to  increases  in the size of
transactions  as a  result  of the  Fund's  larger  asset  base,  as  well as an
increased  number  of  portfolio  transactions  due  to  market  conditions  and
shareholder redemptions.                                                        

AGGREGATED   TRADES.   While   investment   decisions  for  the  Fund  are  made
independently  from any other accounts  advised or managed by the Adviser,  such
other  advisory  clients may invest in the same  securities  as the Fund. To the
extent  permitted by law, the Adviser may aggregate the securities to be sold or
purchased for the Fund with those to be sold or purchased  for other  investment
companies   or  accounts   advised  or  managed  by  the  Adviser  in  executing
transactions.  When a  purchase  or  sale  of  the  same  security  is  made  at
substantially the same time on behalf of the Fund and another investment company
or account advised or managed by the Adviser,  the transaction  will be averaged
as to price and available  investments  allocated as to amount in a manner which
the  Adviser  believes  to be  equitable  to the Fund and such other  investment
company or account. In some instances,  this investment  procedure may adversely
affect  the  price  paid or  received  by the Fund or the  size of the  position
obtained or sold by the Fund.                                                   

PORTFOLIO  TURNOVER.  The  annualized  portfolio  turnover  rate for the Fund is
calculated by dividing the lesser of purchases or sales of portfolio  securities
for  the  reporting  period  by the  monthly  average  value  of  the  portfolio
securities  owned during the  reporting  period.  The  calculation  excludes all
securities  whose  maturities or expiration dates at the time of acquisition are
one year or less.  Portfolio  turnover of the Fund may vary greatly from year to
year as well as within a  particular  year,  and may be  affected  by the Fund's
investment   strategy,   cash   requirements  for  redemption  of  shares,   and
requirements that enable the Fund to receive favorable tax treatment.  Portfolio
turnover will not be a limiting  factor in making Fund  decisions,  and the Fund
may engage in  short-term  trading to achieve  its  investment  objectives.  The
Fund's  portfolio  turnover rate in for the fiscal year ended February 28, 2007,
2006, and 2005 was 73.67%, 121.79%, and 108.24%,  respectively.  The decrease in
the Fund's  portfolio  turnover  rate during the fiscal year ended  February 28,
2006 from the fiscal year ended February 28, 2007 was primarily due to decreased
portfolio trading by the Fund as a result of market conditions during the fiscal
year ended February 28, 2006. The increase in the Fund's portfolio turnover rate
from the fiscal year ended  February 28, 2005 to the fiscal year ended  February
28,  2006 was  primarily  due to  increased  portfolio  trading by the Fund as a
result of to market  conditions  during the fiscal year ended February 28, 2006.
High rates of portfolio  turnover could result in higher  transaction  costs for
the Fund and may also result in the  realization of taxable  short-term  capital
gains.                                                                          

DESCRIPTION OF THE TRUST

The Trust,  which is a statutory  trust organized under Delaware law on December
27, 2002, is an open-end management  investment company. The Trust's Amended and
Restated Agreement and Declaration of Trust ("Trust Instrument")  authorizes the
Trustees  to divide  shares  into  series,  each  series  relating to a separate
portfolio of  investments,  and to classify and reclassify  any unissued  shares

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into one or more  classes  of shares of each such  series.  The Trust  currently
consists of one series:  The Turnaround Fund.  Additional  series and/or classes
may be created  from time to time.  The  number of shares in the Trust  shall be
unlimited.  When issued for payment as described in the Prospectus and this SAI,
shares of each  Fund will be fully  paid and  non-assessable  and shall  have no
preemptive or conversion rights.                                                

In the event of a  liquidation  or  dissolution  of the  Trust or an  individual
series, such as the Fund,  shareholders of a particular series would be entitled
to receive the assets  available  for  distribution  belonging  to such  series.
Shareholders  of a  series  are  entitled  to  participate  equally  in the  net
distributable assets of the particular series involved on liquidation,  based on
the number of shares of the series that are held by each  shareholder.  If there
are any assets,  income,  earnings,  proceeds,  funds,  or payments that are not
readily  identifiable as belonging to any particular  series, the Trustees shall
allocate  them  among  any one or more of the  series  as they,  in  their  sole
discretion, deem fair and equitable.                                            

Shareholders  are entitled to one vote for each full share and a fractional vote
for each fractional share held. Shares have non-cumulative  voting rights, which
means that the holders of more than 50% of the shares voting for the election of
Trustees can elect 100% of the Trustees,  and in this event,  the holders of the
remaining  shares  voting  will not be able to elect  any  Trustees.  Rights  of
shareholders cannot be modified by less than a majority vote.                   

The Trustees  will hold office  indefinitely,  except that:  (i) any Trustee may
resign or retire and (ii) any Trustee  may be  removed:  (a) any time by written
instrument signed by at least two-thirds of the number of Trustees prior to such
removal; (b) at any meeting of shareholders of the Trust by a vote of two-thirds
of the outstanding  shares of the Trust; or (c) by a written  declaration signed
by shareholders  holding not less than  two-thirds of the outstanding  shares of
the  Trust.  In case a vacancy  on the Board of  Trustees  shall for any  reason
exist,  the vacancy shall be filled by the affirmative vote of a majority of the
remaining  Trustees,  subject  to  certain  restrictions  under  the  1940  Act.
Otherwise,  there will normally be no meeting of shareholders for the purpose of
electing  Trustees,  and the Trust does not expect to have an annual  meeting of
shareholders.                                                                   

The Trust Instrument  provides that the Trustees will not be liable in any event
in connection with the affairs of the Trust,  except as such liability may arise
from a Trustee's bad faith, willful misfeasance,  gross negligence,  or reckless
disregard of duties.  It also  provides that all third parties shall look solely
to the Trust property for  satisfaction of claims arising in connection with the
affairs of the Trust. With the exceptions stated, the Trust Instrument  provides
that a Trustee or officer is entitled to be indemnified against all liability in
connection with the affairs of the Trust.                                       

MANAGEMENT AND OTHER SERVICE PROVIDERS

The Trustees are responsible for the management and supervision of the Fund. The
Trustees approve all significant  agreements between the Trust, on behalf of the
Fund, and those companies that furnish services to the Fund; review  performance
of the Adviser and Fund; and oversee activities of the Fund. This section of the
SAI provides information about the persons who serve as Trustees and officers to
the Trust and Fund, respectively,  as well as the entities that provide services
to the Fund.                                                                    

TRUSTEES AND  OFFICERS.  Following are the names of the Trustees and officers of
the Trust,  their ages and addresses,  present positions with the Trust or Fund,
and principal  occupations  during the past five years.  Those  Trustees who are
"interested persons" (as defined in the 1940 Act) by virtue of their affiliation
with either the Trust or the Adviser are indicated in the table.  The address of
each  Trustee  and officer of the Trust,  unless  otherwise  indicated,  is Post
Office Box 7365, Eugene, Oregon 97401-0015.                                     

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                                                        [Enlarge/Download Table]
                                                                                                                                    
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                                                                                          Number of                                 
                                                                                        Portfolios in Fund                          
      Name,                                                                                 Complex                Other            
    Age, and    Position(s) held          Length of Time     Principal Occupation(s)      Overseen by         Directorships Held    
     Address    with Fund/Trust              Served           During Past 5 Years           Trustee               by Trustee        
------------------------------------------------------------------------------------------------------------------------------------

                                                    INDEPENDENT TRUSTEES                                                            
------------------------------------------------------------------------------------------------------------------------------------
Corydon H.       Trustee                   Since 04/2003       President, Station Masters,       1           Director,Elmer's       
Jensen, Jr.,                                                   Inc. (restaurant)                             Restaurant, Inc. (food 
 64                                                                                                          service retailer)      
------------------------------------------------------------------------------------------------------------------------------------
James R.         Trustee                   Since 04/2003       Retired; Previously, President,   1           Trustee, Williams      
Mitchell, 66                                                   Williams Bakery, Inc. (bakery                 Bakery Profit Sharing  
                                                               company)                                      Trust                  
------------------------------------------------------------------------------------------------------------------------------------

                                                  INTERESTED TRUSTEES*                                                              
------------------------------------------------------------------------------------------------------------------------------------
Arne  T. Alsin,  Trustee, Chairman  and     Since 04/2003      President, Alsin Capital          1                   None           
49*              President(Principal                           Management, Inc.(investment                                          
                 Executive Officer)                            adviser for  the Fund)                                               
------------------------------------------------------------------------------------------------------------------------------------
* Basis of Interestedness:  Mr. Alsin is an Interested Trustee because he is an officer of Alsin Capital Management, Inc., the      
investment adviser of the Fund.                                                                                                     
------------------------------------------------------------------------------------------------------------------------------------

                                                     OTHER OFFICERS                                                                 
------------------------------------------------------------------------------------------------------------------------------------
Glenn  D.        Chief Compliance          Chief Compliance    Portfolio Manager, Alsin         n/a                   n/a           
Surowiec, 36     Officer and Treasurer     Officer since       CapitalManagement, Inc.                                              
                 (Principal Financial      9/2004; Treasurer                                                                        
                 Officer)                  since 04/2003                                                                            
------------------------------------------------------------------------------------------------------------------------------------
Jacob S. Brown,  Assistant Treasurer       Since 04/2007       Financial  Reporting  Manager,   n/a                   n/a           
27               and Assistant                                 The Nottingham Company                                               
116 S. Franklin  Secretary                                     (administrator to the Fund) -                                        
Street                                                         since 2003;  previously Intern,                                      
Rocky Mount,                                                   Sara Lee Corporation (food                                           
NC 27804                                                       products and household goods)                                        
------------------------------------------------------------------------------------------------------------------------------------
A. Vason         Secretary                 Since 04/2007       Corporate Counsel,  The          n/a                   n/a           
Hamrick, 30                                                    Nottingham Company since                                             
116 S. Franklin                                                2004; previously student                                             
Street                                                                                                                              
Rocky Mount,                                                                                                                        
NC 27804                                                                                                                            
------------------------------------------------------------------------------------------------------------------------------------

Trustee  Standing  Committees.  The  Trustees  have  established  the  following
standing committees:                                                            

     Audit  Committee:  The Independent  Trustees are the current members of the
Audit  Committee.  The  Audit  Committee  oversees  the  Fund's  accounting  and
financial  reporting  policies and practices,  reviews the results of the annual
audits  of the  Fund's  financial  statements,  and  interacts  with the  Fund's
independent  auditors on behalf of all the Trustees.  The Audit  Committee  also
serves as the Trust's qualified legal compliance committee.  The Audit Committee
operates  pursuant  to an Audit  Committee  Charter  and meets  periodically  as
necessary.  The Audit  Committee  met three times  during the Fund's last fiscal
year.                                                                           

     Nominating  Committee:  The Independent Trustees are the current members of
the Nominating  Committee.  The Nominating  Committee  nominates,  selects,  and
appoints  independent trustees to fill vacancies on the Board of Trustees and to
stand for election at meetings of the  shareholders of the Trust. The Nominating
Committee meets only as necessary and did not meet during the Fund's last fiscal
year.  The  Nominating  Committee  will not  consider  nominees  recommended  by
shareholders of the Trust.                                                      

     Proxy Voting Committee: The Independent Trustees are the current members of
the Proxy Voting  Committee.  The Proxy Voting  Committee will determine how the
Fund should cast its vote,  if called upon by the Board or the  Adviser,  when a
matter with  respect to which the Fund is  entitled to vote  presents a conflict
between the interests of the Fund's shareholders,  on the one hand, and those of
the Fund's Adviser,  principal underwriter,  or an affiliated person of the Fund
on the other hand.  The Proxy  Voting  Committee  will review the Trust's  Proxy
Voting Policy and  recommend  any changes to the Board as it deems  necessary or
advisable.  The  Proxy  Voting  Committee  will  also  decide  if a Fund  should
participate  in a class action  settlement,  if called upon by the  Adviser,  in
cases where a class action  settlement  with respect to which a Fund is eligible
to  participate  presents  a  conflict  between  the  interests  of  the  Fund's

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shareholders,  on the one hand, and those of the Adviser, on the other hand. The
Proxy  Voting  Committee  meets only as  necessary  and did not meet  during the
Fund's last fiscal year.                                                        

Beneficial Equity Ownership Information. The table below shows for each Trustee,
the amount of Fund equity securities beneficially owned by each Trustee, and the
aggregate value of all investments in equity securities of the Fund complex,  as
of  valuation  date of  December  31,  2006 and  stated as one of the  following
ranges: A = None; B = $1-$10,000; C = $10,001-$50,000; D = $50,001-$100,000; and
E = over $100,000.                                                              

                                                        [Enlarge/Download Table]
                                                                                                      
------------------------------------------------------------------------------------------------------
                                                                           Aggregate Dollar Range of  
                                                                            Equity Securities in All  
                                                                             Registered Investment    
                                                                             Companies Overseen By    
                               Dollar Range of Equity Securities             Trustee in Family of     
      Name of Trustee                  in the Fund                           Investment Companies*    
------------------------------------------------------------------------------------------------------

                                    INDEPENDENT TRUSTEES                                              
------------------------------------------------------------------------------------------------------
Corydon H. Jensen, Jr.                        A                                       A               
------------------------------------------------------------------------------------------------------
James R. Mitchell                             A                                       A               
------------------------------------------------------------------------------------------------------
                                    INTERESTED TRUSTEES                                               
------------------------------------------------------------------------------------------------------
Arne T. Alsin                                 E                                       E               
------------------------------------------------------------------------------------------------------

*Family of Investment Companies for the Turnaround Investment Trust   

Compensation.  Officers of the Trust and Trustees who are interested  persons of
the Trust or the Adviser  will  receive no salary or fees from the Trust.  Other
Trustees  receive  $2,000 each year plus $250 per Fund per  meeting  attended in
person and $100 per Fund per meeting attended by telephone. The Trust reimburses
each Trustee and officers of the Trust for his or her travel and other  expenses
relating to attendance at such meetings. The following table reflects the amount
of compensation  received by each Trustee for the fiscal year ended February 28,
2007.                                                                           

                                                        [Enlarge/Download Table]
                                                                                                                                    
------------------------------------------------------------------------------------------------------------------------------------
                               Aggregate         Pension or Retirement       Estimated Annual            Total Compensation From    
                              Compensation       Benefits Accrued As Part      Benefits Upon                  Fund and Fund         
    Name of Trustee           From the Fund        of Fund Expenses             Retirement              Complex Paid to Trustees*   
------------------------------------------------------------------------------------------------------------------------------------
                                                  INDEPENDENT TRUSTEES                                                              
------------------------------------------------------------------------------------------------------------------------------------
Corydon H. Jensen, Jr.          $2,550                   None                     None                            $2,550            
------------------------------------------------------------------------------------------------------------------------------------
James R. Mitchell               $2,550                   None                     None                            $2,550            
------------------------------------------------------------------------------------------------------------------------------------
                                                   INTERESTED TRUSTEES                                                              
------------------------------------------------------------------------------------------------------------------------------------
Arne T. Alsin                    None                    None                     None                             None             
------------------------------------------------------------------------------------------------------------------------------------

* Each of the Trustees serves as a Trustee to the one fund of the Trust.        

CODES OF ETHICS.  The Trust and the Adviser  each have adopted a code of ethics,
as  required  under Rule  17j-1 of the 1940 Act,  which is  designed  to prevent
affiliated  persons of the Trust and the Adviser  from  engaging  in  deceptive,
manipulative,  or fraudulent activities in connection with securities held or to
be acquired by the Fund (which securities may also be held by persons subject to
a code). The code permits employees and officers of the Trust and the Adviser to
invest  in  securities,   subject  to  certain   restrictions  and  pre-approval
requirements.  In addition,  the code requires that portfolio managers and other
investment   personnel  of  the  Adviser   report  their   personal   securities
transactions  and holdings,  which are reviewed for compliance  with the code of
ethics.                                                                         

ANTI-MONEY  LAUNDERING PROGRAM.  The Trust has adopted an anti-money  laundering
program,  as required by applicable  law,  which is designed to prevent the Fund
from being used for money  laundering or the financing of terrorist  activities.
The  Trust's  Chief  Compliance  Officer is  responsible  for  implementing  and
monitoring  the  operations  and internal  controls of the  program.  Compliance

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officers at certain of the Fund's  service  providers are also  responsible  for
monitoring  the program.  The  anti-money  laundering  program is subject to the
continuing oversight of the Trustees.                                           

PROXY  VOTING  POLICIES.  The Trust has  adopted a proxy  voting and  disclosure
policy that delegates to the Adviser the authority to vote proxies for the Fund,
subject to oversight  of the  Trustees.  Copies of the Trust's  Proxy Voting and
Disclosure  Policy and the  Adviser's  Proxy Voting  Policy and  Procedures  are
included as Appendix B to this SAI.                                             

No later than August 31 of each year, the Fund must file Form N-PX with the SEC.
Form  N-PX  states  how an  investment  company  voted  proxies  for  the  prior
twelve-month period ended June 30. The Fund's proxy voting records, as set forth
in the most recent Form N-PX filing, are available upon request, without charge,
by calling the Fund at 1-800-773-3863. This information is also available on the
SEC's website at http://www.sec.gov/.                                           

PRINCIPAL  HOLDERS OF VOTING  SECURITIES.  As of May 31, 2007,  the Trustees and
Officers  of the  Trust as a group  owned  beneficially  (i.e.,  had  direct  or
indirect  voting  and/or  investment  power)  approximately  1.10%  of the  then
outstanding  shares of the Fund. On the same date,  the  following  shareholders
owned of record more than 5% of the outstanding shares of beneficial interest of
the Fund.  Except as provided  below,  no person is known by the Trust to be the
beneficial  owner of more than 5% of the outstanding  shares of any class of the
Fund as of May 31, 2007.                                                        

                                                                [Download Table]
                                                                          
Name and Address of                         Amount and Nature of          
 Beneficial Owner                           Beneficial Ownership  Percent 
 ----------------                           --------------------  ------- 

Ameritrade, Inc.                             153,981.490 shares    32.64%*
For the Exclusive Benefit of its Customers                                
P.O. Box 2226                                                             
Omaha, NE 68103-2226                                                      

Charles Schwab & Co., Inc.                    86,327.508 shares    18.30%*
101 Montgomery Street                                                     
Attn: Mutual Funds Dept                                                   
San Francisco, CA  94104                                                  

Kathy Lee Alsin                               24,062.234 shares    5.10%  
3460 Hathaway Avenue                                                      
Eugene, OR 97401                                                          

* The Fund believes that such entity does not have a beneficial interest of such
shares.                                                                         

INVESTMENT  ADVISER.  Information about the Adviser,  Alsin Capital  Management,
Inc., Post Office Box 7365,  Eugene,  Oregon 97401-0015 and its duties,  control
persons,  and compensation as Adviser is contained in the Prospectus.  As of May
31, 2007, the Adviser had approximately $40 million under management.           

The  Adviser  supervises  the  Fund's  investments   pursuant  to  the  Advisory
Agreement.  The Advisory  Agreement was effective for an initial two-year period
and is  currently  renewed  only  so long as such  renewal  and  continuance  is
specifically approved at least annually by the Trustees or by vote of a majority
of the Fund's outstanding  voting  securities,  provided the continuance is also
approved  by a majority  of the  Trustees  who are not  parties to the  Advisory
Agreement or  interested  persons of any such party.  The Advisory  Agreement is
terminable without penalty by the Trust on 60-days' notice by the Trustees or by
vote of a majority of the outstanding  voting securities or upon 60-days' notice
by  the  Adviser.  The  Advisory  Agreement  provides  that  it  will  terminate
automatically  in the event of its  "assignment," as such term is defined in the
1940 Act.                                                                       

The  Adviser  manages  each Fund's  investments  in  accordance  with the stated
policies of the Fund,  subject to the approval of the  Trustees.  The Adviser is
responsible  for  investment  decisions,  and provides  the Fund with  portfolio
managers who are  authorized  by the Trustees to execute  purchases and sales of
securities.  Arne Torsten Alsin and Glenn David Surowiec are responsible for the
day-to-day management of the Fund's portfolio.                                  

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Under  the  Advisory  Agreement,  the  Adviser  is not  liable  for any error of
judgment or mistake of law or for any loss  suffered  by the Fund in  connection
with the performance of such agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of  compensation  for services;  or a
loss resulting from willful  misfeasance,  bad faith, or gross negligence on the
part of the  Adviser in the  performance  of its  duties;  or from its  reckless
disregard of its duties and obligations under the Advisory Agreement.           

The Adviser  receives a monthly  management fee equal to an annual rate of 1.00%
the Fund's net assets.  In addition,  the Adviser and the Fund have entered into
an Expense  Limitation  Agreement under which the Adviser has agreed to waive or
reduce its fees and to assume other  expenses of the Fund, if  necessary,  in an
amount  that  limits  "Total  Annual  Fund  Operating  Expenses"  (exclusive  of
interest,  taxes,  brokerage fees and commissions,  extraordinary  expenses, and
payments,  if any,  under the Rule  12b-1  Plan) to not more  than  1.75% of the
average  daily net assets of the Fund for the fiscal  year ending  February  28,
2008.  It  is  expected  that  the  contractual  agreement  will  continue  from
year-to-year  provided such  continuance  is approved by the  Trustees.  For the
fiscal year ended  February 28, 2007,  the Adviser  waived all of its fee in the
amount of $79,630 and reimbursed a portion of the Fund's  expenses in the amount
of $30,731.  For the fiscal year ended February 28, 2006,  the Adviser  received
its fee in the amount of $32,185 after voluntarily  waiving a portion of its fee
in the amount of $81,066 and reimbursing a portion of the Fund's expenses in the
amount of $5,795.  For the fiscal  year ended  February  28,  2005,  the Adviser
received its fee in the amount of $39,949 after voluntarily waiving a portion of
its fee in the amount of $95,728.                                               

PORTFOLIO MANAGERS.                                                             

Compensation.  Each of the  portfolio  managers'  compensation  varies  with the
general  success of their advisory firm. Mr. Alsin is a principal of the Adviser
and his compensation is based solely upon the distributable profits generated by
the firm. Mr.  Surowiec's  compensation  is based on the Adviser's  assets under
management.  The portfolio managers'  compensation is not directly linked to the
Fund's performance, though positive performance and growth in managed assets are
factors that may  contribute to the Adviser's  distributable  profits and assets
under management.  In addition,  to the extent increases in Fund assets increase
the  Adviser's  assets  under  management,  such  increases  will  increase  Mr.
Surowiec's compensation level accordingly.                                      

Ownership  of Fund  Shares.  The table  below  shows the  amount of Fund  equity
securities  beneficially  owned by each  portfolio  manager as of the end of the
Fund's  fiscal  year ended  February  28,  2007  stated as one of the  following
ranges: None; $1-$10,000; $10,001-$50,000; $50,001-$100,000;  $100,001-$500,000;
$500,001-$1,000,000; and over $1,000,000.                                       

--------------------------------------------------------------------------------
                               Dollar Range of
                                 Equity Securities
Name of Portfolio Manager                     in the Fund               
--------------------------------------------------------------------------------
Arne T. Alsin                                   $100,001-$500,000               
--------------------------------------------------------------------------------
Glenn D. Surowiec                               $50,001-$100,000                
--------------------------------------------------------------------------------

Other Accounts.  In addition to the Fund, the portfolio  managers  (working as a
team) are responsible  for the day-to-day  management of certain other accounts.
The table below shows the number of, and total assets in, such other accounts as
of the end of the Fund's fiscal year ended February 28, 2007.                   

                                                        [Enlarge/Download Table]
                                                                                                                              
------------------------------------------------------------------------------------------------------------------------------
                                     Registered Investment           Other Pooled Investment                                  
                                          Companies                        Vehicles                    Other Accounts         
                                          ---------                        --------                    --------------         

                                        Number of       Total       Number of     Total        Number of      Total           
           Name                         Accounts        Assets       Accounts     Assets       Accounts       Assets          
------------------------------------------------------------------------------------------------------------------------------
Arne T. Alsin                               0             $0            0          $0            140*       $ 40,000,000*     
------------------------------------------------------------------------------------------------------------------------------
Glenn D. Surowiec                           0             $0            0          $0            140*       $ 40,000,000*     
------------------------------------------------------------------------------------------------------------------------------
Accounts where compensation is based        0             $0            0          $0              0             $0           
upon account performance                                                                                                      
------------------------------------------------------------------------------------------------------------------------------
* Mr. Alsin and Mr. Surowiec jointly manage 140 Other Accounts with total assets of approximately $40,000,000.                
------------------------------------------------------------------------------------------------------------------------------

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Portfolio Managers' Conflicts of Interest. The portfolio managers' management of
"other accounts" may give rise to potential  conflicts of interest in connection
with  their  management  of the  Fund's  investments,  on the one hand,  and the
investments  of the  other  accounts,  on the  other.  The  other  accounts  are
separately managed private clients ("Other Accounts").  The Other Accounts might
have similar  investment  objectives  as the Fund, be compared to the same index
the Fund uses for performance  comparison,  or otherwise hold, purchase, or sell
securities that are eligible to be held, purchased, or sold by the Fund.        

     Knowledge  of the Timing and Size of Fund Trades.  A potential  conflict of
     interest  may  arise  as a result  of the  portfolio  managers'  day-to-day
     management of the Fund. The portfolio  managers know the size and timing of
     trades for the Fund and the Other Accounts,  and may be able to predict the
     market  impact  of Fund  trades.  It is  theoretically  possible  that  the
     portfolio  managers  could use this  information  to the advantage of Other
     Accounts  they manage and to the possible  detriment  of the Fund,  or vice
versa.                                                                

     Investment  Opportunities.  The  Adviser  provides  investment  supervisory
     services for a number of investment  products that have varying  investment
     guidelines.  The same portfolio management team works across all investment
     products.  Differences  in the  compensation  structures  of the  Adviser's
     investment  products may give rise to a conflict of interest by creating an
     incentive  for the  Adviser to allocate  the  investment  opportunities  it
     believes might be the most profitable to the client accounts where it might
benefit the most from the investment gains.                           

ADMINISTRATOR.  The Trust has  entered  into a Fund  Accounting  and  Compliance
Administration  Agreement  with The  Nottingham  Management  Company  d/b/a  The
Nottingham Company ("Administrator"), 116 South Franklin Street, Post Office Box
69, Rocky Mount, North Carolina 27802-0069,  pursuant to which the Administrator
receives an  administration  fee at the following annual rates: on the first $50
million of the Fund's net assets,  0.175%;  on the next $50 million,  0.150%; on
the next $50 million, 0.125%; on the next $50 million, 0.10%; on all assets over
$200 million,  0.075%; with a minimum administration fee of $2,000 per month. In
addition, the Administrator receives a monthly fund accounting fee of $2,250 for
the  first  class of shares  of the Fund and $750 for each  additional  class of
shares of the Fund and an asset  based fee of 1 basis point for  accounting  and
recordkeeping  services  for the Fund.  For  services to the Fund for the fiscal
year  ended  February  28,  2007,  the  Administrator  received  $13,935 in fund
administration  fees and $27,796 in fund  accounting  fees.  For services to the
Fund for the fiscal year ended  February 28, 2006,  the  Administrator  received
$19,819 in fund  administration  fees and $28,133 in fund  accounting  fees. For
services  to the  Fund  for  the  fiscal  year  ended  February  28,  2005,  the
Administrator  received $24,297 in fund  administration fees and $28,357 in fund
accounting  fees. The  Administrator  also receives the following to procure and
pay the custodian  for the Trust:  0.02% on the first $100 million of the Fund's
net assets and 0.009% on all assets over $100 million plus transaction fees with
a minimum  annual fee of $4,800.  The  Administrator  also  charges the Fund for
certain costs  involved with the daily  valuation of investment  securities  and
will be reimbursed for out-of-pocket expenses.                                  

The Administrator  performs the following  services for the Fund: (i) procures a
custodian on behalf of the Trust, and coordinates with and monitors the services
it provides to the Fund;  (ii)  coordinates  with and  monitors  any other third
parties furnishing  services to the Fund; (iii) provides the Fund with necessary
office space,  telephones,  and other  communications  facilities  and personnel
competent to perform  administrative  and clerical  functions for the Fund; (iv)
assists or supervises the maintenance by third parties of such books and records
of the Fund as may be required by  applicable  federal or state law; (v) assists
or supervises the preparation by third parties of all federal,  state, and local
tax returns and reports of the Fund required by applicable  law; (vi) assists in
the  preparation  and, after  approval by the Trust,  files and arranges for the
distribution of proxy materials and periodic reports to shareholders of the Fund
as required by applicable  law;  (vii) assists in the  preparation of and, after
approval by the Trust,  arranges for the filing of such registration  statements
and  other  documents  with  the SEC and  other  federal  and  state  regulatory
authorities as may be required by applicable  law; (viii) reviews and submits to
the  officers of the Trust for their  approval  invoices or other  requests  for
payment of Fund  expenses and instructs the custodian to issue checks in payment
thereof;  and (ix) takes such other  action  with  respect to the Fund as may be
necessary  in the opinion of the  Administrator  to perform its duties under the
agreement.  The  Administrator  also  provides  certain  accounting  and pricing
services for the Fund.                                                          

TRANSFER  AGENT.  The Trust has entered into a Dividend  Disbursing and Transfer
Agent  Agreement  with  North  Carolina  Shareholder  Services,   LLC  d/b/a  NC
Shareholder Services, LLC ("Transfer Agent"), a North Carolina limited liability
company, to serve as transfer,  dividend paying, and shareholder servicing agent
for the Fund. The Transfer  Agent is  compensated  for its services based upon a
$15 fee per shareholder per year,  subject to a minimum fee of $1,750 per month,
plus  $500 per month for each  additional  class of  shares.  In  addition,  the
Transfer  Agent  shall be  entitled  to  reimbursement  of actual  out-of-pocket

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expenses  incurred by the Transfer Agent on behalf of the Trust or the Fund. The
address of the  Transfer  Agent is 116 South  Franklin  Street,  Post Office Box
4365, Rocky Mount, North Carolina 27803-0365. For the fiscal year ended February
28, 2007,  the Transfer  Agent received  $21,000 in such  shareholder  servicing
fees.  For the fiscal year ended  February 28, 2006, the Transfer Agent received
$21,000 in such  shareholder  servicing fees. For the fiscal year ended February
28, 2005,  the Transfer  Agent received  $21,000 in such  shareholder  servicing
fees.                                                                           

DISTRIBUTOR.  The Fund will  conduct a  continuous  offering of its  securities.
Capital Investment Group, Inc. ("Distributor"),  Post Office Box 32249, Raleigh,
North Carolina  27622,  acts as the  underwriter  and  distributor of the Fund's
shares for the purpose of  facilitating  the  registration of shares of the Fund
under state  securities laws and to assist in sales of Fund shares pursuant to a
distribution agreement  ("Distribution  Agreement") approved by the Trustees. In
this  regard,  the  Distributor  has  agreed at its own  expense to qualify as a
broker-dealer  under all applicable  federal or state laws in those states which
the Fund shall from time to time identify to the  Distributor as states in which
it wishes to offer its shares for sale, in order that state registrations may be
maintained for the Fund. The Distributor is a broker-dealer  registered with the
SEC and a member in good  standing of the  National  Association  of  Securities
Dealers,  Inc. For its services as  Distributor,  the Distributor is entitled to
receive from the Trust an annual fee of $5,000,  plus such other  amounts as may
be approved by the  Trustees.  The  Distribution  Agreement may be terminated by
either party upon 60-days' prior written notice to the other party.             

CUSTODIAN.  U.S. Bank,  N.A., Two Liberty Place, 50 S. 16th Street,  Suite 2000,
Mail Station: EX-PA-WBSP, Philadelphia,  Pennsylvania 19102, serves as custodian
for the  Fund's  assets.  The  Custodian  acts as the  depository  for the Fund,
safekeeps its portfolio securities,  collects all income and other payments with
respect to portfolio  securities,  disburses  monies at the Fund's request,  and
maintains  records in connection with its duties as Custodian.  For its services
as Custodian,  the Custodian is entitled to receive from the Administrator a fee
based  on the  average  net  assets  of the  Fund  held  by the  Custodian  plus
additional out of pocket and transaction expenses incurred by the Fund.         

COMPLIANCE  SERVICES  ADMINISTRATOR.  The Trust has  entered  into a  compliance
services arrangement with Nottingham Compliance Services, LLC ("NCS"), 116 South
Franklin  Street,  Post Office Box 69, Rocky Mount,  North Carolina  27802-0069,
pursuant to which NCS, a wholly-owned  affiliate of the  Administrator,  assists
the Trust's  Chief  Compliance  Officer in  preparing  and  updating the Trust's
compliance  manual,  and in monitoring and testing  compliance with the policies
and procedures under the Trust's compliance manual.                             

INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING FIRM. The Trustees have selected the
firm of Briggs,  Bunting &  Dougherty  LLP,  Two Penn Center  Plaza,  Suite 820,
Philadelphia,  Pennsylvania  19102-1732,  to serve as the independent registered
public accounting firm for the Fund for the current fiscal year and to audit the
annual financial  statements of the Fund, prepare the Fund's federal,  state and
excise tax  returns,  and  consult  with the Fund on matters of  accounting  and
federal and state income taxation.                                              

Such firm will  audit the  financial  statements  of the Fund at least once each
year.  Shareholders  will receive  annual  audited and  semi-annual  (unaudited)
reports when published and written  confirmation  of all  transactions  in their
account. A copy of the most recent Annual Report will accompany the SAI whenever
a shareholder or a prospective investor requests it.                            

LEGAL COUNSEL. Kilpatrick Stockton LLP, 1001 West Fourth Street,  Winston-Salem,
North Carolina 27101, serves as legal counsel to the Trust and the Fund.        

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Reference  is  made  to  "Purchasing  Shares"  and  "Redeeming  Shares"  in  the
Prospectus  for more  information  concerning how to purchase and redeem shares.
The following information  supplements the information regarding share purchases
and share redemption in the Prospectus:                                         

PURCHASES.  Shares of the Fund will be offered and sold on a  continuous  basis.
The purchase price of shares of the Fund is the net asset value next  determined
after the order is received,  subject to the order being accepted by the Fund in
good form.  Net Asset Value is normally  determined at the time regular  trading
closes  on the New York  Stock  Exchange  ("NYSE")  on days the NYSE is open for
regular trading (currently 4:00 p.m. Eastern Time, Monday through Friday, except
when the NYSE closes  earlier),  as described under "Net Asset Value" below. The
Fund's net asset value is not  calculated on business  holidays when the NYSE is
closed.  An order received prior to the time regular  trading closes on the NYSE

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will be  executed  at the price  computed  on the date of  receipt  and an order
received  after the time regular  trading closes on the NYSE will be executed at
the price computed as of that time on the next business day.                    

The Fund reserves the right in its sole  discretion  (i) to suspend the offering
of its shares; (ii) to reject purchase orders when in the judgment of management
such  rejection is in the best  interest of the Fund and its  shareholders;  and
(iii) to reduce or to waive the minimum for initial and  subsequent  investments
under  circumstances  where  certain  economies can be achieved in sales of Fund
shares.                                                                         

REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at  any  time.  Available  to  individuals,  custodians,  corporations,  trusts,
estates,  corporate  retirement  plans,  and others,  investors are free to make
additions and withdrawals to or from their  accounts.  When an investor makes an
initial  investment in the Fund, a  shareholder  account is opened in accordance
with the investor's registration instructions.  Each time there is a transaction
in a shareholder account,  such as an additional  investment or the reinvestment
of a dividend or  distribution,  the  shareholder  will  receive a  confirmation
statement  showing the current  transaction  and all prior  transactions  in the
shareholder  account  during the calendar year to date,  along with a summary of
the  status  of the  account  as of  the  transaction  date.  As  stated  in the
Prospectus, share certificates are normally not issued.                         

AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders to
make  regular  monthly or  quarterly  investments  in shares  through  automatic
charges to their  checking  account.  With  shareholder  authorization  and bank
approval,  the Administrator will automatically  charge the checking account for
the amount  specified  ($100  minimum) which will be  automatically  invested in
shares at the public  offering price on or about the 21st day of the month.  The
shareholder  may change the amount of the investment or discontinue  the plan at
any time by writing to the Fund.                                                

PURCHASES IN KIND. The Fund may accept securities in lieu of cash in payment for
the purchase of shares in the Fund. The acceptance of such  securities is at the
sole  discretion of the Adviser  based upon the  suitability  of the  securities
accepted for inclusion as a long-term  investment of the Fund, the marketability
of such securities, and other factors that the Adviser may deem appropriate.  If
accepted,  the securities  will be valued using the same criteria and methods as
described in "How Net Asset Value is Determined" in the Prospectus.             

REDEMPTIONS.  The Fund may suspend redemption privileges or postpone the date of
payment (i) during any period  that the NYSE is closed for other than  customary
weekend and  holiday  closings,  or that  trading on the NYSE is  restricted  as
determined  by the SEC;  (ii)  during any  period  when an  emergency  exists as
defined  by the  rules  of the SEC as a result  of  which  it is not  reasonably
practicable  for the Fund to dispose of securities  owned by it, or to determine
fairly the value of its assets;  and (iii) for such other periods as the SEC may
permit. The Fund may also suspend or postpone the recordation of the transfer of
shares upon the  occurrence of any of the foregoing  conditions.  Any redemption
may be more or less than the shareholder's cost depending on the market value of
the securities  held by the Fund. No charge is made by the Fund for  redemptions
other  than  the  possible  charge  for  wiring  redemption  proceeds,  and  the
assessment of a redemption fee on redemptions  of Fund shares  occurring  within
thirty days  following  the  issuance of such  shares.  For  information  on the
redemption fee, see "Redeeming Shares - Fees on Redemptions" in the Prospectus. 

INVOLUNTARY  REDEMPTIONS.  In  addition  to  the  situations  described  in  the
Prospectus under "Redeeming Shares," the Fund may redeem shares involuntarily to
reimburse  the  Fund  for any loss  sustained  by  reason  of the  failure  of a
shareholder  to make full payment for shares  purchased by the  shareholder,  to
collect  any charge  relating  to a  transaction  effected  for the benefit of a
shareholder  which is  applicable  to Fund shares as provided in the  Prospectus
from time to time, or to close a shareholder's  account if the Fund is unable to
verify the shareholder's identity.                                              

SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $2,500 or
more may establish a systematic withdrawal plan ("Systematic  Withdrawal Plan").
A shareholder may receive monthly or quarterly payments,  in amounts of not less
than $100 per payment, by authorizing the Fund to redeem the necessary number of
shares  periodically  (each month,  or  quarterly in the months of March,  June,
September,  and December) in order to make the payments requested.  The Fund has
the  capability  of  electronically  depositing  the proceeds of the  systematic
withdrawal  directly to the shareholder's  personal bank account ($5,000 minimum
per bank wire).  Instructions for establishing  this service are included in the
Fund Shares Application, enclosed in the Prospectus, or are available by calling
the Fund.  If the  shareholder  prefers to  receive  his  systematic  withdrawal
proceeds in cash,  or if such  proceeds  are less than the $5,000  minimum for a
bank wire,  checks will be made payable to the  designated  recipient and mailed
within seven days of the valuation  date. If the  designated  recipient is other

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than the  registered  shareholder,  the  signature of each  shareholder  must be
guaranteed on the application (see "Redeeming Shares - Signature  Guarantees" in
the Prospectus).  A corporation (or  partnership)  must also submit a "Corporate
Resolution" (or  "Certification of Partnership")  indicating the names,  titles,
and  required  number  of  signatures  authorized  to  act on  its  behalf.  The
application  must be signed by a duly  authorized  officer(s)  and the corporate
seal affixed.  No redemption fees are charged to  shareholders  under this plan.
Costs in conjunction with the  administration of the plan are borne by the Fund.
Shareholders should be aware that such systematic withdrawals may deplete or use
up entirely  their initial  investment  and may result in realized  long-term or
short-term  capital  gains or  losses.  The  Systematic  Withdrawal  Plan may be
terminated  at any  time  by the  Fund  upon  60-days'  written  notice  or by a
shareholder  upon written notice to the Fund.  Applications  and further details
may be obtained by calling the Fund at 1-800-773-3863 or by writing to:         

 The Turnaround Fund
 c/o NC Shareholder Services
 116 South Franklin Street
Post Office Box 4365
Rocky Mount, North Carolina 27803-0365

REDEMPTIONS IN KIND.Redemptions in Kind. The Fund does not intend,  under normal
circumstances,  to redeem its  securities  by payment in kind.  It is  possible,
however,  that conditions may arise in the future which would, in the opinion of
the Trustees,  make it  undesirable  for the Fund to pay for all  redemptions in
cash.  In such case,  the Trustees may  authorize  payment to be made in readily
marketable portfolio securities of the Fund.  Securities delivered in payment of
redemptions  would be valued at the same value assigned to them in computing the
net asset value per share.  Shareholders  receiving  them would incur  brokerage
costs when these securities are sold.                                           

OTHER  INFORMATION.  If an  investor  realizes  a gain  on the  redemption,  the
reinvestment will not affect the amount of any federal capital gains tax payable
on the gain. If an investor realizes a loss on the redemption,  the reinvestment
may cause some or all of the loss to be disallowed as a tax deduction, depending
on the number of shares  purchased by  reinvestment  and the period of time that
has  elapsed  after  the  redemption,  although  for tax  purposes,  the  amount
disallowed is added to the cost of the shares acquired upon the reinvestment.   

A pattern of frequent  exchange  transactions may be deemed by the Adviser to be
an abusive practice that is not in the best interests of the shareholders of the
Fund.  Such a pattern may, at the  discretion of the Adviser,  be limited by the
Fund's  refusal  to accept  further  purchase  and/or  exchange  orders  from an
investor,  after providing the investor with 60 days' prior notice. The Trustees
also reserve the right to suspend, terminate, or amend the terms of the exchange
privilege upon 60 days' written notice to the shareholders.                     

SPECIAL SHAREHOLDER SERVICES

The Fund offers the following special shareholder services:                     

TRANSFER OF  REGISTRATION.  To transfer shares to another owner,  send a written
request to the Fund at the address shown above.  Your request should include the
following:   (i)  the  Fund  name  and  existing  account   registration;   (ii)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s) on
the account registration;  (iii) the new account registration,  address,  social
security or taxpayer  identification number, and how dividends and capital gains
are to be distributed;  (iv) signature  guarantees (See the Prospectus under the
heading  "Signature  Guarantees");  and (v) any additional  documents  which are
required  for transfer by  corporations,  administrators,  executors,  trustees,
guardians,  etc. If you have any questions about  transferring  shares,  call or
write the Fund.                                                                 

EMPLOYEES AND  AFFILIATES OF THE FUND. The Fund has adopted  initial  investment
minimums for the purpose of reducing the cost to the Fund (and  consequently  to
the  shareholders)  of  communicating  with and servicing its  shareholders.  In
keeping  with this  purpose,  a reduced  minimum  initial  investment  of $1,000
applies to  Trustees,  officers,  and  employees  of the Fund;  the  Adviser and
certain  parties  related  thereto;  including  clients  of the  Adviser  or any
sponsor,  officer,  committee member thereof,  or the immediate family of any of
them. In addition,  accounts  having the same mailing  address may be aggregated
for purposes of the minimum  investment  if they consent in writing to sharing a
single  mailing  of  shareholder  reports,   proxy  statements  (but  each  such
shareholder would receive his/her own proxy), and other Fund literature.        

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DEALERS. The Distributor, at its expense, may provide additional compensation in
addition to dealer discounts and brokerage  commissions to dealers in connection
with sales of shares of the Fund.  Compensation may include financial assistance
to dealers in connection with conferences,  sales or training programs for their
employees,  seminars for the public,  advertising  campaigns regarding the Fund,
and/or  other   dealer-sponsored   special  events.  In  some  instances,   this
compensation may be made available only to certain dealers whose representatives
have  sold  or are  expected  to  sell a  significant  amount  of  such  shares.
Compensation  may  include  payment  for  travel  expenses,  including  lodging,
incurred in connection  with trips taken by invited  registered  representatives
and  members  of their  families  to  locations  within or outside of the United
States for meetings or seminars of a business nature.  Dealers may not use sales
of the Fund  shares to qualify for this  compensation  to the extent such may be
prohibited by the laws of any state or any  self-regulatory  agency, such as the
National  Association  of Securities  Dealers,  Inc. None of the  aforementioned
compensation  is paid  directly  by the Fund or its  shareholders  although  the
Distributor may use a portion of the payment it receives under the  Distribution
Plan to pay these expenses.                                                     

DISCLOSURE OF PORTFOLIO HOLDINGS

The  Trustees  have adopted a policy that  governs the  disclosure  of portfolio
holdings.  This policy is intended to ensure that such disclosure is in the best
interests of the shareholders of the Fund and to address  possible  conflicts of
interest.  Under the Fund's  policy,  the Fund and  Adviser  generally  will not
disclose the Fund's portfolio  holdings to a third party unless such information
is made available to the public.  The policy  provides that the Fund and Adviser
may disclose  non-public  portfolio holdings  information as required by law and
under other limited circumstances that are set forth in more detail below.      

The Fund will make  available  to the public a complete  schedule  of the Fund's
portfolio  holdings,  as reported on a fiscal quarter basis. This information is
generally  available  within 60 days of the Fund's  fiscal  quarter end and will
remain  available  until the next fiscal  quarter's  portfolio  holdings  report
becomes available.  You may obtain a copy of these quarterly  portfolio holdings
reports by  calling  the Fund at  1-800-773-3863.  The Fund will also file these
quarterly  portfolio holdings reports with the SEC on Form N-CSR or Form N-Q, as
applicable.  The  Fund's  Form  N-CSR  and Form N-Q are  available  on the SEC's
website  at  www.sec.gov  and may be  reviewed  and  copied at the SEC's  Public
Reference Room in Washington, DC. The first and third quarter portfolio holdings
reports will be filed with the SEC on Form N-Q and the second and fourth  fiscal
quarter  portfolio  holdings  reports will be included with the  semi-annual and
annual financial  statements,  respectively,  which are sent to shareholders and
filed with the SEC on Form N-CSR.                                               

The officers of the Fund and/or the officers of the Adviser may share non-public
portfolio  holdings  information with the Fund's service  providers that require
such information for legitimate  business and Fund oversight  purposes,  such as
the Fund's fund  accountant  and  administrator,  transfer  agent,  distributor,
custodian,  compliance  services  administrator,  independent  registered public
accounting  firm,  and legal counsel as identified in the Fund's  Prospectus and
SAI, and V.G. Reed & Sons,  PrintGrafix (a division of Sunbelt Graphic  Systems,
Inc.),  Riverside Printing,  Inc., and PrinterLink  Communications  Group, Inc.,
financial  printers the Fund may engage for,  among other  things,  the printing
and/or  distribution  of regulatory  and compliance  documents.  The Fund and/or
Adviser  may  also  provide  non-public   portfolio   holdings   information  to
appropriate  regulatory agencies as required by applicable laws and regulations.
The Fund's service providers  receiving such non-public  information are subject
to  confidentiality   obligations  requiring  such  service  providers  to  keep
non-public portfolio holdings information confidential.                         

The Fund currently does not provide non-public portfolio holdings information to
any other  third  parties.  In the future,  the Fund may elect to disclose  such
information  to other third  parties if the officers of the Fund and/or  Adviser
determine that the Fund has a legitimate  business  purpose for doing so and the
recipient  is subject to a duty of  confidentiality.  The  Adviser,  through its
officers,  is  responsible  for  determining  which other third  parties  have a
legitimate   business  purpose  for  receiving  the  Fund's  portfolio  holdings
information. Certain of the service providers have codes of ethics that prohibit
trading based on, among other things, non-public portfolio holdings information.

The Fund's policy regarding  disclosure of portfolio  holdings is subject to the
continuing   oversight  and   direction  of  the   Trustees.   The  Adviser  and
Administrator are required to report to the Trustees any known disclosure of the
Fund's  portfolio  holdings  to  unauthorized  third  parties.  The Fund has not
entered (and does not intend to enter) into any  arrangement  providing  for the
receipt of compensation or other consideration in exchange for the disclosure of
non-public portfolio holdings information.  In addition, the Fund and/or Adviser
may, from time to time,  provide additional  portfolio  holdings  information as
described in the Fund's Prospectus.                                             

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 NET ASSET VALUE

The net asset value and net asset value per share of each class of shares of the
Fund ("Class")  normally is determined at the time regular trading closes on the
NYSE (currently 4:00 p.m., Eastern Time, Monday through Friday,  except when the
NYSE closes earlier).  The Fund's net asset value per share is not calculated on
business  holidays when the NYSE is closed.  The NYSE  generally  recognizes the
following  holidays:  New Year's Day,  Martin Luther King, Jr. Day,  President's
Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, and
Christmas  Day.  Any  other  holiday  recognized  by the NYSE  will be  deemed a
business  holiday on which the net asset value per share of the Fund will not be
calculated.                                                                     

In computing the Fund's net asset value, all liabilities incurred or accrued are
deducted from its net assets. The resulting net assets are divided by the number
of shares of the Fund outstanding at the time of the valuation and the result is
the net asset value per share of the Fund.                                      

The pricing and valuation of portfolio securities is determined in good faith in
accordance  with  procedures  established  by, and under the  direction  of, the
Trustees.  Values are determined  according to accepted accounting practices and
all laws and regulations that apply. Using methods approved by the Trustees, the
assets of the Fund are generally valued as follows:                             

     o    Securities that are listed on a securities  exchange are valued at the
          last  quoted  sales  price at the time the  valuation  is made.  Price
          information on listed  securities is taken from the exchange where the
security is primarily traded by the Fund.                   

     o    Securities  that are listed on an exchange and which are not traded on
the valuation date are valued at the bid price.             

     o    Unlisted  securities for which market quotations are readily available
          are valued at the latest quoted sales price, if available, at the time
of valuation, otherwise, at the latest quoted bid price.    

     o    Temporary cash  investments with maturities of 60 days or less will be
valued at amortized cost, which approximates market value.  

     o    Options are valued as follows: (1) exchange-listed  options are valued
          at the last quoted sales price at the time of valuation.  For purposes
          of determining the primary exchange the following applies:  (i) if the
          option is traded on the Chicago Board Options Exchange  ("CBOE"),  the
          CBOE is considered the primary exchange unless the Adviser  identifies
          a  different  primary  exchange  for the option and (ii) if the option
          does  not  trade on the  CBOE,  the  Adviser  identifies  the  primary
          exchange  for the  option;  (2)  unlisted  options  for  which  market
          quotations  are readily  available are valued at the last quoted sales
          price at the time of  valuation;  (3)if an option is not traded on the
          valuation  date,  the option is priced at the mean of the last  quoted
          bid and ask price at the time of  valuation;  and (4) an option may be
          valued  at fair  value  when  (i) the  option  does  not  trade on the
          valuation  date and (ii)  reliable  last quoted bid and ask prices are
not available.                                              

     o    Securities for which no current  quotations are readily  available are
          valued  at fair  value  as  determined  in good  faith  using  methods
          approved  by the  Trustees.  Securities  may be valued on the basis of
          prices  provided by a pricing service when such prices are believed to
reflect the fair market value of such securities.           

     o    Securities may be valued on the basis of prices  provided by a pricing
          service when such prices are believed to reflect the fair market value
of such securities.                                         

Subject  to  the  provisions  of the  Trust  Instrument,  determinations  by the
Trustees as to the direct and allocable liabilities and the allocable portion of
any general  assets,  with respect to the Fund and the classes of the Fund,  are
conclusive.                                                                     

In valuing the Fund's total assets, portfolio securities are generally valued at
their market value. Instruments with maturities of sixty days or less are valued
at amortized costs,  which approximate  market value.  Securities and assets for
which  representative  market quotations are not readily available are valued at
fair value as determined in good faith under policies approved by the Trustees. 

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ADDITIONAL TAX INFORMATION

The  following  summarizes  certain  additional  tax  considerations   generally
affecting  the  Fund  and  its  shareholders  that  are  not  described  in  the
Prospectus.  No attempt is made to  present a  detailed  explanation  of the tax
treatment  of the  Fund or its  shareholders.  The  discussions  here and in the
Prospectus  are not  intended as a  substitute  for careful tax planning and are
based on tax laws and  regulations  that are in  effect on the date  hereof  and
which  may be  changed  by  legislative,  judicial,  or  administrative  action.
Investors are advised to consult  their tax advisers with specific  reference to
their own tax situations.                                                       

The Fund,  and any other  series of the  Trust,  will be  treated  as a separate
corporate entity under the Internal  Revenue Code of 1986, as amended  ("Code"),
and intends to qualify or remain  qualified  as a regulated  investment  company
under  Subchapter M of the Code. In order to so qualify,  the Fund must elect to
be a regulated  investment  company or have made such an election for a previous
year  and  must  satisfy  certain   requirements   relating  to  the  amount  of
distributions  and source of its income for a taxable  year. At least 90% of the
gross income of the Fund must be derived from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stocks,
securities, or foreign currencies,  and other income derived with respect to the
Fund's  business of  investing in such stock,  securities,  or  currencies.  Any
income  derived  by the Fund from a  partnership  or trust is treated as derived
with  respect to the Fund's  business  of  investing  in stock,  securities,  or
currencies  only to the  extent  that such  income is  attributable  to items of
income  that would have been  qualifying  income if  realized by the Fund in the
same manner as by the partnership or trust.                                     

An investment company may not qualify as a regulated  investment company for any
taxable  year  unless it  satisfies  certain  requirements  with  respect to the
diversification  of its  investments at the close of each quarter of the taxable
year.  In  general,  at least  50% of the  value  of its  total  assets  must be
represented  by cash,  cash items,  government  securities,  securities of other
regulated investment companies,  and other securities which, with respect to any
one issuer,  do not  represent  more than 5% of the total assets of the fund nor
more than 10% of the outstanding  voting securities of such issuer. In addition,
not more than 25% of the value of the fund's total assets may be invested in the
securities  (other  than  government  securities  or  the  securities  of  other
regulated investment companies) of any one issuer; the securities of two or more
issuers (other than securities of another regulated  investment  company) if the
issuers are  controlled by the Fund and they are,  pursuant to Internal  Revenue
Service  Regulations,  engaged  in the same or  similar  or  related  trades  or
businesses;  or the securities of one or more publicly traded partnerships.  The
Fund  intends to satisfy  all  requirements  on an ongoing  basis for  continued
qualification as a regulated investment company.                                

The 2003 Jobs and Growth Tax Relief  Reconciliation  Act reduced the federal tax
rate on most dividends paid by U.S.  corporations to individuals  after December
31, 2002. These qualifying  corporate dividends are taxable at long-term capital
gains tax rates.  Some,  but not all, of the  dividends  paid by the Fund may be
taxable  at  the  reduced  long-term  capital  gains  tax  rate  for  individual
shareholders. If the Fund designates a dividend as qualified dividend income, it
generally will be taxable to individual  shareholders  at the long-term  capital
gains tax rate, provided certain holding period requirements are met.           

Taxable  dividends paid by the Fund to corporate  shareholders  will be taxed at
corporate  income  tax  rates.  Corporate  shareholders  may  be  entitled  to a
dividends  received  deduction  ("DRD") for a portion of the dividends  paid and
designated by the Fund as qualifying for the DRD.                               

To the extent  that a  distribution  from the Fund is taxable,  it is  generally
included  in a  shareholder's  gross  income for the  taxable  year in which the
shareholder  receives  the  distribution.  However,  if the  Fund  designates  a
dividend  as a capital  gains  distribution,  it  generally  will be  taxable to
shareholders as long-term capital gains, regardless of how long the shareholders
have held their Fund shares or whether  they  received  the  dividend in cash or
reinvested in additional  shares.  All taxable  dividends paid by the Fund other
than  those   designated   as  qualified   dividend   income  or  capital  gains
distributions  will be  taxable  as  ordinary  income to  shareholders,  whether
received in cash or  reinvested  in  additional  shares.  To the extent the Fund
engages  in  increased  portfolio  turnover,  short-term  capital  gains  may be
realized,  and any  distribution  resulting  from such gains will be  considered
ordinary income for federal tax purposes.                                       

Shareholders  who  hold  Fund  shares  in  a  tax-deferred  account,  such  as a
retirement plan,  generally will not have to pay tax on Fund distributions until
they receive distributions from their account.                                  

The Fund, and any other series of the Trust,  will designate (i) any dividend of
qualified  dividend  income as qualified  dividend  income;  (ii) any tax-exempt
dividend as an  exempt-interest  dividend;  (iii) any  distribution of long-term
capital gains as a capital gain dividend; and (iv) any dividend eligible for the
corporate  dividends  received  deduction as such in a written  notice mailed to

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shareholders  within  60 days  after  the  close  of the  Fund's  taxable  year.
Shareholders  should note that, upon the sale or exchange of Fund shares, if the
shareholder  has not held such shares for at least six  months,  any loss on the
sale or exchange of those  shares will be treated as  long-term  capital loss to
the extent of the capital gain dividends received with respect to the shares.   

If the Fund declares a dividend in October,  November, or December,  but pays it
in January,  it will be taxable to  shareholders as if the dividend was received
in the year it was  declared.  Every  year,  each  shareholder  will  receive  a
statement detailing the tax status of any Fund distributions for that year.     

A 4% nondeductible  excise tax is imposed on regulated investment companies that
fail to currently  distribute an amount equal to specified  percentages of their
ordinary  taxable  income and capital gain net income  (excess of capital  gains
over capital  losses).  The Fund  intends to make  sufficient  distributions  or
deemed  distributions  of its ordinary  taxable  income and any capital gain net
income prior to the end of each calendar year to avoid liability for this excise
tax.                                                                            

If for any taxable year the Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal  income tax at regular  corporate  rates (without any
deduction  for  distributions  to its  shareholders).  In such  event,  dividend
distributions  (whether or not derived from interest on  tax-exempt  securities)
would be taxable as qualified dividends to individual shareholders to the extent
of the  Fund's  current  and  accumulated  earnings  and  profits,  and would be
eligible for the dividends received deduction for corporations.                 

In general,  a  shareholder  who sells or redeems  shares will realize a capital
gain  or  loss,  which  will be  long-term  or  short-term  depending  upon  the
shareholder's  holding period for the Fund shares.  An exchange of shares may be
treated as a sale and any gain may be subject to tax.                           

The Fund will be  required in certain  cases to  withhold  and remit to the U.S.
Treasury  a  percentage  equal to the  fourth  lowest  tax  rate  for  unmarried
individuals  (presently 28% for 2007) of taxable  dividends or of gross proceeds
realized upon sale paid to shareholders who have failed to provide a correct tax
identification number in the manner required,  who are subject to withholding by
the  Internal  Revenue  Service for failure to include  properly on their return
payments of taxable interest or dividends,  or who have failed to certify to the
Fund that they are not subject to backup  withholding when required to do so, or
that they are "exempt recipients."                                              

Depending  upon the extent of the Fund's  activities in states and localities in
which its offices are maintained, in which its agents or independent contractors
are located, or in which it is otherwise deemed to be conducting  business,  the
Fund may be subject to the tax laws of such states or  localities.  In addition,
in those states and  localities  that have income tax laws, the treatment of the
Fund and its shareholders  under such laws may differ from their treatment under
federal income tax laws.                                                        

Dividends  paid by the Fund to  non-U.S.  shareholders  may be  subject  to U.S.
withholding tax at the rate of 30% unless reduced by treaty (and the shareholder
files a valid Internal  Revenue Service Form W-8BEN,  or other  applicable form,
with the Fund certifying foreign status and treaty  eligibility) or the non-U.S.
shareholder  files an Internal Revenue Service Form W-8ECI,  or other applicable
form,  with the Fund  certifying  that the investment to which the  distribution
relates is  effectively  connected to a United  States trade or business of such
non-U.S.  shareholder  (and, if certain tax treaties apply, is attributable to a
United States permanent establishment maintained by such non-U.S.  shareholder).
The Fund  may  elect  not to  withhold  the  applicable  withholding  tax on any
distribution  representing  a capital gain  dividend to a non-U.S.  shareholder.
Special rules may apply to non-U.S. shareholders with respect to the information
reporting  requirements and withholding taxes and non-U.S.  shareholders  should
consult their tax advisors  with respect to the  application  of such  reporting
requirements and withholding taxes.                                             

The Fund  will send  shareholders  information  each  year on the tax  status of
dividends  and  distributions.  A dividend or capital  gains  distribution  paid
shortly  after  shares  have  been  purchased,  although  in  effect a return of
investment, is subject to federal income taxation. Dividends from net investment
income,  along with  capital  gains,  will be taxable to  shareholders,  whether
received in cash or Fund shares and no matter how long the  shareholder has held
Fund  shares,  even if they  reduce  the net  asset  value of  shares  below the
shareholder's  cost and  thus,  in  effect,  result in a return of a part of the
shareholder's investment.                                                       

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 ADDITIONAL INFORMATION ON PERFORMANCE

From time to time, the total return of the Fund may be quoted in advertisements,
sales literature,  shareholder reports, or other communications to shareholders.
The  "average  annual  total  return" of the Fund refers to the  average  annual
compounded  rate of return over the stated  period that would  equate an initial
investment in that Fund at the beginning of the period to its ending  redeemable
value, assuming reinvestment of all dividends and distributions and deduction of
all recurring  charges,  other than charges and deductions  which may be imposed
under the Fund's  contracts.  Performance  figures  will be given for the recent
one, five, or ten year periods or for the life of the Fund if it has not been in
existence for any such periods.  When considering  "average annual total return"
figures  for  periods  longer than one year,  it is  important  to note that the
Fund's  annual  total  return for any given year might have been greater or less
than its average for the entire period. "Cumulative total return" represents the
total change in value of an investment in the Fund for a specified period (again
reflecting  changes  in Fund  share  prices and  assuming  reinvestment  of Fund
distributions).                                                                 

The  following  is  a  brief  description  of  how  performance  is  calculated.
Quotations  of average  annual  total  return for the Fund will be  expressed in
terms  of the  average  annual  compounded  rate  of  return  of a  hypothetical
investment  in the Fund over periods of one year,  five years,  and ten years or
since  inception (as  applicable).  These are the average  annual total rates of
return that would equate the initial  amount  invested to the ending  redeemable
value.                                                                          

The average  annual total return  (before  taxes) is  calculated  by finding the
average annual  compounded rates of return over the applicable period that would
equate the  initial  amount  invested to the ending  value  using the  following
formula:                                                                        

P(1+T)^n = ERV

Where    P = a hypothetical initial payment of $1,000                           
T = average annual total return                               
n = number of years                                           
    ERV = Ending Redeemable Value of a hypothetical initial payment of
$1,000                                            

The average annual total return (after taxes on  distributions) is calculated by
finding the average annual compounded rates of return over the applicable period
that would  equate the initial  amount  invested  to the ending  value using the
following formula:                                                              

 P(1+T)^n = ATVd

Where    P = a hypothetical  initial  payment of $1,000                         
T = average annual total return (after taxes on distributions)
n = number of years                                           
    ATVd = Ending  Redeemable Value of a hypothetical  initial payment
             of $1,000,  after taxes on fund  distributions  but not after
taxes on redemption                             

The average annual total return (after taxes on  distributions  and sale of fund
shares) is calculated by finding the average annual  compounded  rates of return
over the applicable  period that would equate the initial amount invested to the
ending value using the following formula:                                       

P(1+T)^n = ATVdr

Where    P = a hypothetical initial payment of $1,000                           
         T = average  annual total  return  (after  taxes on  distributions  and
redemptions)                                          
n = number of years                                           
    ATVdr = Ending Redeemable Value of a hypothetical  initial payment
             of $1,000, after taxes on fund distributions and redemption

The  calculation  of average  annual  total  return and  aggregate  total return
assumes an initial  $1,000  investment  and  reinvestment  of all  dividends and
capital gain  distributions  on the  reinvestment  dates during the period.  The
ending  redeemable  value is determined by assuming  complete  redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations.  These performance  quotations should
not be considered as representative of the Fund's  performance for any specified
period in the future.                                                           

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The average annual total returns before taxes on  distributions  of the Fund for
the fiscal year ended February 28, 2007 and the period since April 9, 2003, date
of commencement of operations of the Fund  ("Inception"),  through  February 28,
2007 were 11.98% and 12.78 %,  respectively.  The cumulative total return before
taxes on distributions of the Fund since Inception through February 28, 2007 was
59.72 %.                                                                        

The average  annual total returns after taxes on  distributions  of the Fund for
the fiscal year ended February 28, 2007 and the period since  Inception  through
February 28, 2007 were 11.81 % and 12.00%,  respectively.  The cumulative  total
return after taxes on distributions of the Fund since Inception through February
28, 2007 was 55.44%.                                                            

The average annual total returns after taxes on distributions and sale of shares
of the Fund for the fiscal year ended  February  28,  2007 and the period  since
Inception  through February 28, 2007 were 8.00 % and 10.88%,  respectively.  The
cumulative total return after taxes on  distributions  and sale of shares of the
Fund since Inception through February 28, 2007 was 49.50%.                      

The Fund's  performance  may be compared in  advertisements,  sales  literature,
shareholder reports, and other communications to the performance of other mutual
funds having similar objectives or to standardized  indices or other measures of
investment performance.  In particular,  the Fund may compare its performance to
the  S&P  500  Total  Return  Index,   which  is  generally   considered  to  be
representative  of the performance of unmanaged  common stocks that are publicly
traded  in the  U.  S.  securities  markets.  The  Fund  may  also  measure  its
performance  against  the  appropriate  Lipper  Equity  Index,  which  ranks the
performance of mutual funds that have similar portfolio  holdings and investment
objective.  Comparative  performance  may also be  expressed  by  reference to a
ranking  prepared  by a  mutual  fund  monitoring  service  or by  one  or  more
newspapers,   newsletters,   or  financial   periodicals.   The  Fund  may  also
occasionally  cite  statistics to reflect its  volatility and risk. The Fund may
also compare its  performance to other  published  reports of the performance of
unmanaged portfolios of companies.  The performance of such unmanaged portfolios
generally  does not reflect the effects of dividends  or dividend  reinvestment.
The Fund may also compare its performance to other reports of the performance of
managed accounts of the Adviser.  Of course,  there can be no assurance the Fund
will  experience  the same  results.  Performance  comparisons  may be useful to
investors  who wish to compare  the  Fund's  past  performance  to that of other
mutual funds and  investment  products.  Of course,  past  performance  is not a
guarantee of future results.                                                    

The Fund's performance  fluctuates on a daily basis largely because net earnings
and net asset value per share fluctuate  daily.  Both net earnings and net asset
value per share are  factors in the  computation  of total  return as  described
above.                                                                          

As indicated,  from time to time the Fund may advertise its performance compared
to similar funds or portfolios using certain indices,  reporting  services,  and
financial  publications.  These may include the following:                      

     o    Lipper  Analytical  Services,   Inc.,  ranks  funds  in  various  fund
          categories  by making  comparative  calculations  using total  return.
          Total  return   assumes  the   reinvestment   of  all  capital   gains
          distributions  and income  dividends and takes into account any change
in net asset value over a specific period of time.          

     o    Morningstar,  Inc., an independent rating service, is the publisher of
          the bi-weekly  Mutual Fund Values.  Mutual Fund Values rates more than
          1,000  NASDAQ-listed  mutual  funds of all  types  according  to their
          risk-adjusted  returns.  The maximum rating is five stars, and ratings
are effective for two weeks.                                

Investors may use such indices in addition to the Fund's  Prospectus to obtain a
more complete view of the Fund's performance before investing.  Of course,  when
comparing the Fund's  performance  to any index,  factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or  total  return,   investors  should  take  into  consideration  any  relevant
differences in funds such as permitted  portfolio  compositions and methods used
to value portfolio securities and to compute offering price.  Advertisements and
other sales  literature for the Fund may quote total returns that are calculated
on  non-standardized  base  periods.  The total  returns  represent the historic
change in the value of an investment  in the Fund based on monthly  reinvestment
of dividends over a specified period of time.                                   

From  time  to  time,  the  Fund  may  include  in   advertisements   and  other
communications charts and illustrations relating to inflation and the effects of
inflation on the dollar, including the purchasing power of the dollar at various
rates of inflation.  The Fund may also  disclose  from time to time  information
about its  portfolio  allocation  and holdings at a particular  date  (including
ratings of securities assigned by independent rating services such as Standard &
Poor's Ratings Services and Moody's Investors Service,  Inc.). The Fund may also
depict the historical performance of the securities in which the Fund may invest

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over periods reflecting a variety of market or economic  conditions either alone
or in comparison  with  alternative  investments,  performance  indices of those
investments, or economic indicators. The Fund may also include in advertisements
and in materials furnished to present and prospective shareholders statements or
illustrations  relating to the  appropriateness  of types of  securities  and/or
mutual  funds that may be employed to meet  specific  financial  goals,  such as
saving for retirement, children's education, or other future needs.             

FINANCIAL STATEMENTS

The audited  financial  statements  for the fiscal year ended February 28, 2007,
including   the  financial   highlights   appearing  in  the  Annual  Report  to
shareholders, are incorporated by reference and made a part of this document.   

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 APPENDIX A - DESCRIPTION OF RATINGS

The  Fund  may  acquire  from  time to time  certain  securities  that  meet the
following  minimum rating criteria  ("Investment-Grade  Debt Securities") (or if
not rated,  of equivalent  quality as  determined  by the Adviser).  The various
ratings  used  by the  nationally  recognized  securities  rating  services  are
described below.                                                                

A rating by a rating service  represents the service's  opinion as to the credit
quality of the security  being rated.  However,  the ratings are general and are
not absolute standards of quality or guarantees as to the creditworthiness of an
issuer. Consequently,  the Adviser believes that the quality of Investment-Grade
Debt Securities in which the Fund may invest should be continuously reviewed and
that  individual  analysts  give  different  weightings  to the various  factors
involved in credit analysis. A rating is not a recommendation to purchase, sell,
or hold a  security,  because  it does not take  into  account  market  value or
suitability  for a  particular  investor.  When a security has received a rating
from more than one service, each rating is evaluated independently.  Ratings are
based on current  information  furnished by the issuer or obtained by the rating
services from other sources that they consider reliable. Ratings may be changed,
suspended,  or  withdrawn  as a result of changes in or  unavailability  of such
information, or for other reasons.                                              

STANDARD & POOR'S(R) RATINGS SERVICES. The following summarizes the highest four
ratings  used by  Standard & Poor's  Ratings  Services  ("S&P"),  a division  of
McGraw-Hill  Companies,  Inc., for bonds which are deemed to be Investment-Grade
Debt Securities by the Adviser:                                                 

     AAA - This is the highest rating  assigned by S&P to a debt  obligation and
     indicates an extremely strong capacity of the obligor to meet its financial
commitment on the obligation.                                         

     AA - Debt rated AA  differs  from AAA issues  only by a small  degree.  The
     obligor's  capacity to meet its financial  commitment on the  obligation is
very strong.                                                          

     A - Debt rated A is somewhat  more  susceptible  to the adverse  effects of
     changes in circumstances and economic  conditions than debt in higher-rated
     categories.   However,   the  obligor's  capacity  to  meet  its  financial
commitment on the obligation is still strong.                         

     BBB - Debt rated BBB  exhibits  adequate  protection  parameters.  However,
     adverse economic  conditions or changing  circumstances  are more likely to
     lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.                                                    

To  provide  more  detailed  indications  of credit  quality,  the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.                                  

Bonds  rated BB, B, CCC,  CC,  and C are not  considered  by the  Adviser  to be
Investment-Grade   Debt  Securities  and  are  regarded  as  having  significant
speculative characteristics. BB indicates the lowest degree of speculation and C
the highest  degree of  speculation.  While such bonds may have some quality and
protective  characteristics,  these may be outweighed by large  uncertainties or
major risk exposures to adverse conditions.                                     

Commercial  paper rated A-1 by S&P indicates that the degree of safety regarding
timely payment is strong.  Those issues  determined to possess  extremely strong
safety  characteristics  are  denoted  A-1+.  Capacity  for  timely  payment  on
commercial paper rated A-2 is satisfactory, but the relative degree of safety is
not as high as for issues designated A-1.                                       

The rating  SP-1 is the highest  rating  assigned by S&P to short term notes and
indicates strong capacity to pay principal and interest.  An issue determined to
possess  a very  strong  capacity  to pay  debt  service  is  given  a plus  (+)
designation.  The rating SP-2 indicates a satisfactory capacity to pay principal
and interest,  with some vulnerability to adverse financial and economic changes
over the term of the notes. The rating SP-3 indicates a speculative  capacity to
pay principal and interest.                                                     

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MOODY'S INVESTOR SERVICE, INC. The following summarizes the highest four ratings
used by Moody's Investors Service, Inc. ("Moody's") for fixed-income obligations
with  an  original  maturity  of one  year  or  more,  which  are  deemed  to be
Investment-Grade Securities by the Adviser:                                     

     Aaa - Bond  obligations  rated Aaa are judged to be of the highest quality,
with minimal credit risk.                                             

     Aa - Bond  obligations  rated Aa are judged to be of high  quality  and are
subject to very low credit risk.                                      

     A - Bond  obligations  rated A are  considered  upper-medium  grade and are
subject to low credit risk.                                           

     Baa - Bond obligations  rated Baa are subject to moderate credit risk. They
     are considered  medium-grade  and as such may possess  certain  speculative
characteristics.                                                      

Obligations  that are rated Ba, B, Caa,  Ca or C by Moody's  are not  considered
"Investment-Grade  Debt  Securities"  by the Adviser.  Obligations  rated Ba are
judged to have speculative  elements and are subject to substantial credit risk.
Obligations  rated B are considered  speculative  and are subject to high credit
risk. Obligations rated Caa are judged to be of poor standing and are subject to
very high credit risk.                                                          

Note:  Moody's  appends  numerical  modifiers 1, 2, and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking;  and the modifier 3 indicates a ranking in the lower end of
that generic rating category.                                                   

Short-Term Ratings.                                                             

Moody's  short-term  ratings  are  opinions  on the  ability of issuers to honor
short-term financial obligations. Ratings may be assigned to issuers, short-term
programs, or individual short-term debt instruments.  Such obligations generally
have an original maturity not exceeding 13 months, unless explicitly noted.     

Moody's employs the following  designations  to indicate the relative  repayment
ability of rated issuers:                                                       

     P-1 - Issuers (or  supporting  institutions)  rated Prime-1 have a superior
ability to repay short-term debt obligations.                         

     P-2 - Issuers (or  supporting  institutions)  rated  Prime-2  have a strong
ability to repay short-term debt obligations.                         

     P-3 - Issuers (or supporting institutions) rated Prime-3 have an acceptable
ability to repay short-term obligations.                              

     NP -  Issuers  (or  supporting  institutions)  rated  Not Prime do not fall
within any of the Prime rating categories.                            

Note:  Canadian issuers rated P-1 or P-2 have their short-term  ratings enhanced
by  the  senior-most   long-term   rating  of  the  issuer,   its  guarantor  or
support-provider.                                                               

US Municipal Short-Term Debt And Demand Obligation Ratings.                     

Short-Term  Debt  Ratings.  There are three  rating  categories  for  short-term
municipal  obligations that are considered  investment grade.  These ratings are
designated as Municipal Investment Grade (MIG) and are divided into three levels
- MIG 1 through MIG 3. In addition,  those  short-term  obligations  that are of
speculative  quality are designated SG, or speculative grade. MIG ratings expire
at the maturity of the obligation.                                              

     MIG  1 -  This  designation  denotes  superior  credit  quality.  Excellent
     protection is afforded by established cash flows, highly reliable liquidity
    support, or demonstrated broad-based access to the market for refinancing.

     MIG  2 -  This  designation  denotes  strong  credit  quality.  Margins  of
protection are ample, although not as large as in the preceding group.

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     MIG 3 - This designation  denotes acceptable credit quality.  Liquidity and
     cash-flow  protection may be narrow,  and market access for  refinancing is
likely to be less well-established.                                   

     SG -  This  designation  denotes  speculative-grade  credit  quality.  Debt
 instruments in this category may lack sufficient margins of protection.

Demand  Obligation  Ratings.  In the case of variable  rate  demand  obligations
(VRDOs),  a two-component  rating is assigned,  a long or short-term debt rating
and a demand obligation  rating. The first element represents Moody's evaluation
of the degree of risk associated with scheduled principal and interest payments.
The  second  element  represents  Moody's  evaluation  of  the  degree  of  risk
associated  with the  ability to receive  purchase  price upon  demand  ("demand
feature"),  using a variation of the MIG rating  scale,  the Variable  Municipal
Investment Grade or VMIG rating.                                                

When either the long- or short-term aspect of a VRDO is not rated, that piece is
designated NR, e.g., Aaa/NR or NR/VMIG 1.                                       

VMIG rating  expirations are a function of each issue's  specific  structural or
credit features.                                                                

     VMIG  1 - This  designation  denotes  superior  credit  quality.  Excellent
     protection is afforded by the superior  short-term  credit  strength of the
     liquidity  provider and  structural and legal  protections  that ensure the
timely payment of purchase price upon demand.                         

     VMIG 2 - This designation denotes strong credit quality. Good protection is
     afforded by the strong short-term credit strength of the liquidity provider
     and  structural  and legal  protections  that ensure the timely  payment of
purchase price upon demand.                                           

     VMIG 3 - This  designation  denotes  acceptable  credit  quality.  Adequate
     protection is afforded by the  satisfactory  short-term  credit strength of
     the liquidity provider and structural and legal protections that ensure the
timely payment of purchase price upon demand.                         

     SG - This  designation  denotes  speculative-grade  credit quality.  Demand
     features  rated in this  category may be supported by a liquidity  provider
     that does not have an investment  grade  short-term  rating or may lack the
     structural and/or legal protections  necessary to ensure the timely payment
of purchase price upon demand.                                        

FITCH RATINGS.  The following summarizes the highest four ratings used by Fitch,
Inc. ("Fitch"):                                                                 

Long-Term Ratings.                                                              

     AAA - Highest credit quality. The rating AAA denotes the lowest expectation
     of  credit  risk.  It is  assigned  only in cases of  exceptionally  strong
     capacity for timely  payment of  financial  commitments.  This  capacity is
highly unlikely to be adversely affected by foreseeable events.       

     AA - Very high credit quality. The rating AA denotes a very low expectation
     of credit risk. It indicates a very strong  capacity for timely  payment of
     financial  commitments.  This capacity is not  significantly  vulnerable to
foreseeable events.                                                   

     A - High credit  quality.  The rating A denotes a low expectation of credit
     risk.  The  capacity  for  timely  payment  of  financial   commitments  is
     considered strong. This capacity may,  nevertheless,  be more vulnerable to
     changes in  circumstances  or in economic  conditions  than is the case for
higher rating.                                                        

     BBB - Good credit quality. The rating BBB indicates that there is currently
     a low  expectation  of credit  risk.  The  capacity  for timely  payment of
     financial  commitments  is  considered  adequate,  but  adverse  changes in
     circumstances  and in  economic  conditions  are more likely to impair this
capacity. This is the lowest investment grade category.               

Long-term  securities rated below BBB by Fitch are not considered by the Adviser
to be  investment-grade  securities.  Securities  rated BB and B are regarded as
speculative with regard to a possible credit risk  developing.  BB is considered
speculative and B is considered  highly  speculative.  Securities rated CCC, CC,
and C are regarded as a high default risk. A rating CC indicates that default of

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some kind appears probable,  while a rating C signals imminent default. A rating
of DDD, DD, and D indicate a default has occurred.                              

Short-Term Ratings.                                                             

     F1 - Highest credit quality. The rating F1 indicates the strongest capacity
     for  timely  payment  of  financial  commitments;  may have an added (+) to
denote any exceptionally strong credit feature.                       

     F2 - Good credit quality.  The rating F2 indicates a satisfactory  capacity
     for timely payment of financial commitment, but the margin of safety is not
as great as in the case of the higher ratings.                        

     F3 - Fair credit  quality.  The rating F3 indicates the capacity for timely
     payment of financial  commitments is adequate;  however,  near-term adverse
changes could result in a reduction to non-investment grade.          

     B - Speculative. The rating B indicates minimal capacity for timely payment
     of financial  commitments,  plus vulnerability to near-term adverse changes
in financial and economic conditions.                                 

Short-term  securities  rated B, C, and D by Fitch are considered by the Adviser
to be  below  investment-grade  securities.  Short-term  securities  rated B are
considered  speculative,  securities  rated  C  have a high  default  risk,  and
securities rated D denote actual or imminent payment default.                   

(+) or (-) suffixes may be appended to a rating to denote relative status within
major rating categories.  Such suffixes are not added to long-term ratings "AAA"
category or to the categories below "CCC", nor to short-term  ratings other than
"F1".  The suffix "NR" indicates that Fitch does not publicly rate the issuer or
issue in question.                                                              

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APPENDIX B - PROXY VOTING POLICIES

The following proxy voting policies are provided:                               

(1)  the Trust's Proxy Voting and Disclosure Policy and               

     (2)  the Adviser's Proxy Voting and Disclosure Policy, including a detailed
  description of the Adviser's specific proxy voting guidelines.

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 TURNAROUND INVESTMENT TRUST

PROXY VOTING AND DISCLOSURE POLICY

I.   Introduction                                                               

Effective April 14, 2003, the Securities and Exchange Commission ("SEC") adopted
rule and form  amendments  under  the  Securities  Act of 1933,  the  Securities
Exchange  Act of  1934,  and the  Investment  Company  Act of 1940  ("Investment
Company Act") to require registered  management  investment companies to provide
disclosure   about  how  they  vote  proxies  for  their  portfolio   securities
(collectively,  the rule and form  amendments  are referred to herein as the "IC
Amendments").                                                                   

The IC Amendments require that the Turnaround Investment Trust ("Trust") and its
series of shares,  The  Turnaround  Fund  ("Fund"),  disclose  the  policies and
procedures used to determine how to vote proxies for portfolio  securities.  The
IC Amendments  also require the Fund to file with the SEC and to make  available
to its shareholders the specific proxy votes cast for portfolio securities.     

This Proxy Voting and  Disclosure  Policy  ("Policy") is designed to ensure that
the Fund  complies with the  requirements  of the IC  Amendments,  and otherwise
fulfills  its  obligations  with  respect  to  proxy  voting,   disclosure,  and
recordkeeping.  The overall  goal is to ensure that the Fund's  proxy  voting is
managed in an effort to act in the best  interests  of its  shareholders.  While
decisions  about how to vote must be determined on a case-by-case  basis,  proxy
voting  decisions will be made  considering  these  guidelines and following the
procedures recited herein.                                                      

II.  Specific Proxy Voting Policies and Procedures                              

A.   General                                                          

     The Trust's Board of Trustees ("Board") believes that the voting of proxies
     is  an  important  part  of  portfolio   management  as  it  represents  an
     opportunity  for  shareholders  to make their voices heard and to influence
     the direction of a company.  The Trust and the Fund are committed to voting
     corporate  proxies in the manner  that best  serves  the  interests  of the
Fund's shareholders.                                                  

B.   Delegation to Fund's Adviser                                     

     The Board believes that Alsin Capital Management,  Inc. ("Adviser"), as the
     Fund's  investment  adviser,  is in the best  position  to make  individual
     voting  decisions  for the Fund  consistent  with this  Policy.  Therefore,
     subject to the oversight of the Board,  the Adviser is hereby delegated the
following duties:                                                     

1.   to make the proxy voting decisions for the Fund; and             
     2.   to assist the Fund in  disclosing  the Fund's proxy  voting  record as
          required by Rule 30b1-4 under the  Investment  Company Act,  including
          providing  the following  information  for each matter with respect to
          which the Fund was entitled to vote: (a)  information  identifying the
          matter  voted on; (b) whether the matter was proposed by the issuer or
          by a security holder;  (c) whether and how the Fund cast its vote; and
 (d) whether the Fund cast its vote for or against management.

     The Board,  including a majority of the independent  trustees of the Board,
     must approve the Adviser's Proxy Voting and Disclosure  Policy  ("Adviser's
     Voting  Policy") as it relates to the Fund. The Board must also approve any
     material  changes  to the  Adviser's  Voting  Policy no later than four (4)
months after adoption by Adviser.                                     

C.   Conflicts                                                        

     In cases  where a matter  with  respect to which a Fund is entitled to vote
     presents a conflict between the interest of the Fund's shareholders, on the
     one  hand,  and  those  of  the  Fund's   investment   adviser,   principal
     underwriter, or an affiliated person of the Fund, its investment adviser or
     principal underwriter, on the other hand, the Fund shall always vote in the
     best interest of the Fund's  shareholders.  For purposes of this Policy,  a

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     vote shall be considered  in the best  interest of the Fund's  shareholders
     (i) when a vote is cast  consistent  with a specific  voting  policy as set
     forth in the Adviser's Voting Policy,  provided such specific voting policy
     was approved by the Board;  or (ii) when a vote is cast consistent with the
     decision of the Trust's  Proxy  Voting  Committee  (as defined  below).  In
     addition,  provided  that neither the Adviser is  affiliated  with a Fund's
     principal  underwriter or an affiliated person of the principal underwriter
     nor  the  Fund's  principal  underwriter  or an  affiliated  person  of the
     principal  underwriter  has influenced the Adviser with respect to a matter
     to which the Fund is entitled to vote,  a vote by the Adviser  shall not be
     considered  a  conflict  between  the  Fund's  shareholders  and the Fund's
  principal underwriter or affiliated person of the principal underwriter.

III. Fund Disclosure                                                            

     A.   Disclosure  of Fund  Policies  and  Procedures  With Respect to Voting
Proxies Relating to Portfolio Securities                    

     Beginning with the Fund's next annual update to its Statement of Additional
     Information  ("SAI")  on Form  N-1A  after  July 1,  2003,  the Fund  shall
     disclose this Policy,  or a description  of the policies and  procedures of
     this Policy, to its shareholders.  The Fund will notify shareholders in the
     SAI and the Fund's shareholder reports that a description of this Policy is
     available upon request,  without charge,  by calling a specified  toll-free
     telephone  number, by reviewing the Fund's website,  if applicable,  and by
     reviewing filings available on the SEC's website at http://www.sec.gov. The
     Fund will send this  description of the Fund's Policy within three business
     days of receipt of any shareholder  request,  by first-class  mail or other
means designed to ensure equally prompt delivery.                     

B.   Disclosure of the Fund's Complete Proxy Voting Record            

     In accordance  with Rule 30b1-4 of the  Investment  Company Act,  beginning
     after June 30, 2004,  the Fund shall disclose to its  shareholders  on Form
     N-PX the Fund's  complete proxy voting record for the  twelve-month  period
ended June 30 by no later than August 31 of each year.                

     The Fund shall  disclose the  following  information  on Form N-PX for each
     matter  relating  to a portfolio  security  considered  at any  shareholder
     meeting  held during the period  covered by the report and with  respect to
which to the Fund was entitled to vote:                               

1.   The name of the issuer of the portfolio security;                
     2.   The exchange  ticker  symbol of the  portfolio  security (if available
through reasonably practicable means);                      
     3.   The Council on Uniform Security  Identification  Procedures  ("CUSIP")
          number for the  portfolio  security (if available  through  reasonably
practicable means);                                         
4.   The shareholder meeting date;                                    
5.   A brief identification of the matter voted on;                   
     6.   Whether the matter was proposed by the issuer or by a security holder;
7.   Whether the Fund cast its vote on the matter;                    
     8.   How the Fund cast its vote (e.g., for or against proposal, or abstain;
for or withhold regarding election of directors); and       
9.   Whether the Fund cast its vote for or against management.        

     The Fund shall  make its proxy  voting  record  available  to  shareholders
     either upon  request or by making  available  an  electronic  version on or
     through the Fund's website, if applicable.  If the Fund discloses its proxy
     voting  record  on  or  through  its  website,  the  Fund  shall  post  the
     information disclosed in the Fund's most recently filed report on Form N-PX
     on the website  beginning the same day it files such  information  with the
SEC.                                                                  

     The Fund shall also include in its annual reports,  semi-annual reports and
     SAI a  statement  that  information  regarding  how the Fund voted  proxies
     relating to portfolio securities during the most recent twelve-month period
     ended June 30 is available (1) without  charge upon  request,  by calling a
     specified toll-free (or collect) telephone number, or (if applicable) on or
     through the Fund's website at a specified Internet address;  and (2) on the
     SEC's  website.  If the Fund  discloses  that its  proxy  voting  record is
     available by calling a toll-free (or collect)  telephone  number,  it shall
     send the information  disclosed in the Fund's most recently filed report on
     Form N-PX  within  three  business  days of receipt  of a request  for this

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     information,  by first-class mail or other means designed to ensure equally
prompt delivery.                                                      

IV.  Recordkeeping                                                              

The Trust shall keep the following  records for a period of at least five years,
the first two in an easily accessible place:                                    

1.   A copy of this Policy;                                                     
2.   Proxy statements received regarding the Fund's securities;                 
3.   Records of votes cast on behalf of the Fund; and                           
4.   A record of each shareholder  request for proxy voting  information and the
     Fund's  response,  including  the  date  of the  request,  the  name of the
shareholder, and the date of the response.                            

The foregoing records may be kept as part of the Adviser's records.             

The Fund may rely on proxy  statements  filed on the SEC EDGAR system instead of
keeping its own copies,  and may rely on proxy  statements  and records of proxy
votes cast by the Adviser that are maintained with a third party such as a proxy
voting service, provided that an undertaking is obtained from the third party to
provide a copy of the documents promptly upon request.                          

V.   Proxy Voting Committee                                                     

A.   General                                                          

     The Proxy  Voting  Committee  of the Trust  shall be  composed  entirely of
     independent  trustees of the Board and may be comprised of one or more such
     independent  trustees  as the Board  may,  from time to time,  decide.  The
     purpose of the Proxy Voting  Committee  shall be to determine  how the Fund
     should cast its vote,  if called upon by the Board or the  Adviser,  when a
     matter  with  respect  to which the Fund is  entitled  to vote  presents  a
     conflict between the interest of the Fund's shareholders,  on the one hand,
     and those of the Fund's investment adviser,  principal  underwriter,  or an
     affiliated  person  of  the  Fund,  its  investment  adviser  or  principal
underwriter, on the other hand.                                       

B.   Powers and Methods of Operation                                  

     The Proxy Voting  Committee shall have all the powers  necessary to fulfill
     its purpose as set forth above and shall have such other powers and perform
     such other duties as the Board may, from time to time,  grant and/or assign
     the Proxy Voting  Committee.  The Proxy Voting Committee shall meet at such
     times and places as the Proxy Voting  Committee or the Board may, from time
     to time,  determine.  The act of a  majority  of the  members  of the Proxy
     Voting  Committee  in  person,  by  telephone  conference  or by consent in
     writing  without a meeting shall be the act of the Proxy Voting  Committee.
     The Proxy  Voting  Committee  shall have the  authority  to  utilize  Trust
     counsel  at the  expense  of the  Trust  if  necessary.  The  Proxy  Voting
     Committee  shall prepare minutes of each meeting and keep such minutes with
     the Trust's  records.  The Proxy Voting  Committee shall review this Policy
    and recommend any changes to the Board as it deems necessary or advisable.

VI.  Other                                                                      

This Policy may be amended, from time to time, as determined by the Board.      

Adopted as of this 17th day of June, 2003.                                      

35

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ALSIN CAPITAL MANAGEMENT, INC.
PROXY VOTING POLICIES AND PROCEDURES
__________________________________________________________________

1.  Background                                                                  

The act of  managing  assets in client  portfolios  consisting  of common  stock
normally includes the important function of voting proxies related to the stock.
The investment  adviser has the fiduciary  responsibility for voting the proxies
in a manner that is in the best interests of the client.                        

Investment  advisers  with  such  responsibility   should  implement  procedures
designed to ensure that proxies are voted in an appropriate manner. The policies
and procedures of Alsin Capital Management,  Inc. ("Adviser") for voting proxies
received by accounts managed by the Adviser are set forth below.                

2.  Proxy Voting Policies                                                       

Adviser shall vote proxies  related to securities held by any client in a manner
solely in the interest of the client.  Adviser shall consider only those factors
that relate to the client's investment, including how its vote will economically
impact and affect the value of the client's  investment.  Proxy votes  generally
will be cast in favor of  proposals  that  maintain  or  strengthen  the  shared
interests of shareholders and management,  increase shareholder value,  maintain
or increase  shareholder  influence  over the issuer's  board of  directors  and
management,  and  maintain or increase the rights of  shareholders;  proxy votes
generally will be cast against  proposals having the opposite effect.  In voting
on each and every issue,  Adviser and its employees  shall vote in a prudent and
diligent  fashion and only after a careful  evaluation of the issue presented on
the ballot.                                                                     

3.   Proxy Voting Procedures                                                    

          A.   Unless the power to vote proxies for a client is reserved to that
               client (or in the case of an employee  benefit  plan,  the plan's
               trustee   or   other   fiduciaries),   the   investment   adviser
               representative  for the client's  account will be responsible for
voting the proxies related to that account.       

          B.   All proxies and  ballots  will be logged in upon  receipt and the
               materials will be forwarded to the appropriate investment adviser
representative.                                   

          C.   The investment adviser  representative will promptly vote proxies
               received in a manner  consistent  with the Proxy Voting  Policies
and Procedures.                                   

          D.   The investment adviser representative will note on the cover page
               of the proxy how he or she voted on each  issue.  The proxy  will
               then be filed and becomes a permanent  part of the records of the
Adviser.                                          

          E.   On an ongoing basis, each investment adviser  representative will
               monitor corporate management of issuers whose securities are held
               by clients whose accounts he or she manages and where appropriate
   will communicate with the management of such issuers.

F.   Periodically, the Adviser will:                        

               a.   Verify that each proxy  received  has been voted in a manner
                    consistent with the Proxy Voting Policies and Procedures and
the  guidelines.                        
               b.   Review the files to verify that records of the voting of the
proxies have been properly maintained.  

September 29, 2004                                                              

36

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘497’ Filing		Date		First		Last			Other Filings
		2/29/08		7		9
		2/28/08		35
		8/31/07		9					N-CSRS,  N-PX,  NSAR-A
Filed on / Effective on:		7/3/07
		6/28/07		1		20			485BPOS
		5/31/07		34					N-Q
		3/31/07		6
		2/28/07		7		46			24F-2NT,  N-CSR,  NSAR-B
		12/31/06		7		33
		9/30/06		6
		8/31/06		9					N-CSRS,  N-PX,  NSAR-A
		2/28/06		16		37			24F-2NT,  N-CSR,  NSAR-B
		2/28/05		30		37			24F-2NT,  N-CSR,  NSAR-B
		12/31/04		6
		9/29/04		55
		6/30/04		53					N-PX
		2/29/04		17		30			24F-2NT,  N-CSR,  NSAR-B
		7/1/03		53
		4/14/03		52					497
		4/9/03		7		45
		12/31/02		42					N-8A
		12/27/02		10		30
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