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PFS Funds – ‘N-CSRS’ for 9/30/14

On:  Friday, 12/5/14, at 4:34pm ET   ·   Effective:  12/5/14   ·   For:  9/30/14   ·   Accession #:  1413042-14-339   ·   File #:  811-09781

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/05/14  PFS Funds                         N-CSRS      9/30/14    3:149K                                   Premier Fd Solut… Inc/FA
          → NWM Momentum Fund ⇒ MOMOX

Document/Exhibit                   Description                      Pages   Size 

 1: N-CSRS      Certified Semi-Annual Shareholder Report of a       HTML    103K 
                          Management Investment Company                          
 3: EX-99.906 CERT  Miscellaneous Exhibit                           HTML      7K 
 2: EX-99.CERT  Miscellaneous Exhibit                               HTML     14K 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-09781

PFS Funds
(Exact name of registrant as specified in charter)

CT Corporation System
155 Federal St., Suite 700,
Boston, MA 02110
(Name and address of agent for service)

Registrant's telephone number, including area code: (619) 588-9700

Date of fiscal year end: March 31

Date of reporting period: September 30, 2014

Item 1. Reports to Stockholders.

NWM MOMENTUM FUND

SEMI-ANNUAL REPORT
September 30, 2014

TICKER MOMOX

NWM MOMENTUM FUND                                                                                          

PERFORMANCE INFORMATION (Unaudited)

September 30, 2014 NAV $9.82

TOTAL RETURNS AS OF SEPTEMBER 30, 2014

Annual Fund Operating Expense Ratio (from 4/1/14 Prospectus): 1.95%

The Annual Fund Operating Expense Ratio reported above will not correlate to the expense ratio in the Fund’s financial highlights because the financial highlights include only the direct operating expenses incurred by the Fund, not the indirect costs of investing in acquired funds.

^(A)Since Inception returns include change in share prices and in each case includes reinvestment of any dividends and capital gain distributions. The NWM MomentumFund commenced operations on April 1, 2014. ^(B)The S&P 500® Index is a widely recognized unmanaged index of equity prices and is representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.

^(C)The MSCI® EAFE® Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of the following 22 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURNS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. TO OBTAIN PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, PLEASE CALL 1-888-331-9609. AN INVESTMENT IN THE FUND IS SUBJECT TO INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. THE FUND'S DISTRIBUTOR IS RAFFERTY CAPITAL MARKETS, LLC.

2014 Semi-Annual Report 1

NWM MOMENTUM FUND                                                                                                    

                                                         NWM Momentum Fund
                                           by Sectors (as a percentage of Net Assets)
                                                                      (Unaudited)

Availability of Quarterly Schedule of Investments
(Unaudited)

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC's Web site at http://www.sec.gov. The Fund’s Form N-Q may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Proxy Voting Guidelines
(Unaudited)

NWM Fund Group, LLC, the Fund’s investment adviser (“Adviser”), is responsible for exercising the voting rights associated with the securities held by the Fund. A description of the policies and procedures used by the Adviser in fulfilling this responsibility is available without charge on the Fund’s website at www.nwmfund.com. It is also included in the Fund’s Statement of Additional Information, which is available on the SEC’s website at http://www.sec.gov.

Information regarding how the Fund voted proxies, Form N-PX, relating to portfolio securities during the most recent period ended June 30th, is available without charge, upon request, by calling our toll free number (1-888-331-9609). This information is also available on the SEC’s website at http://www.sec.gov.

2014 Semi-Annual Report 2

Expense Example
(Unaudited)

Shareholders of this Fund incur ongoing costs consisting of management fees and service fees. Although the Fund charges no sales loads or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by Mutual Shareholder Services, LLC, the Fund’s transfer agent. IRA accounts will be charged an $8.00 annual maintenance fee. If shares are redeemed within 90 days of purchase from the Fund, the shares are subject to a 2% redemption fee. Additionally, your account will be indirectly subject to the expenses of the underlying funds. The following example is intended to help you understand your ongoing costs of investing in the Fund and to compare these costs with similar costs of investing in other mutual funds. The example is based on an investment of $1,000 invested in the Fund on April 1, 2014 and held through September 30, 2014.

The first line of the table below provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6) and then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period." The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid by a shareholder for the period. Shareholders may use this information to compare the ongoing costs of investing in this Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in other funds' shareholder reports.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees or the charges assessed by Mutual Shareholder Services, LLC as described above and expenses of underlying funds. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

2014 Semi-Annual Report 3

2014 Semi-Annual Report 4

* Reflects a 2% redemption fee if shares are redeemed within 90 days of purchase.

2014 Semi-Annual Report 5

2014 Semi-Annual Report 6

NOTES TO THE FINANCIAL STATEMENTS
NWM MOMENTUM FUND
September 30, 2014
(UNAUDITED)

1.) ORGANIZATION:
NWM Momentum Fund (the “Fund”) was organized as a non-diversified series of the PFS Funds (the “Trust”) on March 5, 2014. The Trust was established under the laws of Massachusetts by an Agreement and Declaration of Trust dated January 13, 2000. Prior to March 5, 2010, the Trust was named Wireless Fund. The Trust is registered as an open-end investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust may offer an unlimited number of shares of beneficial interest in a number of separate series, each series representing a distinct fund with its own investment objectives and policies. As of September 30, 2014, there were nine series authorized by the Trust. The Fund commenced operations on April 1, 2014. The Fund's investment objective is to seek long-term capital appreciation. The investment adviser to the Fund is NWM Fund Group, LLC (the “Adviser”). Significant accounting policies of the Fund are presented below:

2.) SIGNIFICANT ACCOUNTING POLICIES:
SECURITY VALUATION:
All investments in securities are recorded at their estimated fair value, as described in Note 3.

SHARE VALUATION:
The net asset value (the “NAV”) is generally calculated as of the close of trading on the New York Stock Exchange (normally 4:00 p.m. Eastern time) every day the Exchange is open. The NAV is calculated by taking the total value of the Fund’s assets, subtracting its liabilities, and then dividing by the total number of shares outstanding, rounded to the nearest cent. The offering price and redemption price per share is equal to the net asset value per share, except that shares of the Fund are subject to a redemption fee of 2% if redeemed within 90 days of purchase. During the six month period ended September 30, 2014, proceeds from redemption fees were $0.

FEDERAL INCOME TAXES:
The Fund’s policy is to continue to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all of its taxable income to shareholders. Therefore, no federal income tax provision is required. It is the Fund’s policy to distribute annually, prior to the end of the calendar year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Code. This Internal Revenue Code requirement may cause an excess of distributions over the book year-end accumulated income. In addition, it is the Fund’s policy to distribute annually, after the end of the fiscal year, any remaining net investment income and net realized capital gains.

The Fund recognizes the tax benefits of certain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Fund’s tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Fund’s initial tax return. The Fund identifies its major tax jurisdictions as U.S. Federal tax authorities; however, the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the six month period ended September 30, 2014, the Fund did not incur any interest or penalties.

DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date.

The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense, or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of the net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, result of operations, or net asset value per share of the Fund.

2014 Semi-Annual Report 7

Notes to the Financial Statements (Unaudited) - continued

USE OF ESTIMATES:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

ORGANIZATIONAL & OFFERING EXPENSES:
All costs incurred by the Fund in connection with the organization, offering and initial registration of the Fund, principally professional fees, were paid on behalf of the Fund by the Adviser and will not be borne by the Fund.

EXPENSES:
Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds based on each fund’s relative net assets or another appropriate basis.

OTHER:
The Fund records security transactions based on a trade date. Dividend income is recognized on the ex-dividend date, and interest income is recognized on an accrual basis. Discounts and premiums on securities purchased are accreted and amortized over the lives of the respective securities. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.

3.) INVESTMENT SECURITIES VALUATION
The Fund utilizes various methods to measure the fair value of most of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2 - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

FAIR VALUE MEASUREMENTS
A description of the valuation techniques applied to the Fund’s major categories of assets measured at fair value on a recurring basis follows:

Equity securities (exchange traded funds). Equity securities that are traded on any exchange or on the NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking a last sale price, a long security is valued at its last bid price except when, in the Adviser's opinion, the last bid price does not accurately reflect the current value of the long security. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in

2014 Semi-Annual Report 8

Notes to the Financial Statements (Unaudited) - continued

level 1 of the fair value hierarchy. When market quotations are not readily available, when the Adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board of Trustees (the “Trustees”) and are categorized in level 2 or level 3, when appropriate.

In accordance with the Trust's good faith pricing guidelines, the Adviser is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above. There is no single standard for determining fair value, since fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the Adviser would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods.

The following table summarizes the inputs used to value the Fund’s assets measured at fair value as of September 30, 2014:

The Fund did not hold any Level 3 assets during the six month period ended September 30, 2014. There were no transfers into or out of level 1 and level 2 during the six month period ended September 30, 2014. It is the Fund’s policy to consider transfers into or out of level 1 and level 2 as of the end of the reporting period.

The Fund did not invest in derivative instruments during the six month period ended September 30, 2014.

4.) INVESTMENT ADVISORY AGREEMENT AND SERVICES AGREEMENT
The Fund has entered into an investment advisory agreement (“Management Agreement”) with the Adviser. The Adviser manages the investment portfolio of the Fund, subject to policies adopted by the Trust's Board of Trustees, and, at its own expense and without reimbursement from the Trust, furnishes office space and all necessary office facilities, equipment and executive personnel necessary for managing the Fund. For its services the Adviser receives an investment management fee equal to 1.25% of the Fund's average daily net assets up to $100 million, 1.10% of the Fund's average daily net assets between $100 million and $150 million, 1.00% of the Fund's average daily net assets between $150 million and $200 million and 0.90% of the Fund's average daily net assets in excess of $200 million.

Under the terms of the Services Agreement between the Trust and the Adviser (the "Services Agreement"), the Adviser renders administrative and supervisory services to the Fund, provides the services of a chief compliance officer and assumes and pays all ordinary expenses of the Fund, excluding management fees, brokerage fees and commissions, 12b-1 fees (If adopted), taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), ADR fees, fees and expenses of aquired funds, extraordinary or non-recurring expenses. For its services, the Adviser receives a service fee equal to 0.50% of the average daily net assets of the Fund.

For the six month period ended September 30, 2014, the Adviser earned management fees totaling $178,381, of which $34,777 was due to the Adviser at September 30, 2014. For the same period, the Adviser earned service fees of $71,353, of which $13,911 was due to the Adviser at September 30, 2014.

5.) RELATED PARTY TRANSACTIONS
Jeffrey R. Provence of Premier Fund Solutions, Inc. (the “Administrator”) also serves as trustee/officer of the Fund. This individual receives benefits from the Administrator resulting from administration fees paid to the Administrator of the Fund by the Adviser.

The Trustees who are not interested persons of the Fund were paid a total of $1,500 in Trustees’ fees for the six month period ended September 30, 2014 by the Adviser.

2014 Semi-Annual Report 9

Notes to the Financial Statements (Unaudited) - continued

6.) CAPITAL SHARES
The Trust is authorized to issue an unlimited number of shares. Paid in capital at September 30, 2014 was $33,752,143, representing 3,400,177 shares outstanding.

7.) INVESTMENT TRANSACTIONS
For the six month period ended September 30, 2014, purchases and sales of investment securities other than U.S. Government obligations and short-term investments aggregated $172,817,929 and $139,232,235, respectively. Purchases and sales of U.S. Government obligations aggregated $0 and $0, respectively.

For Federal income tax purposes, the cost of securities owned at September 30, 2014 was $33,747,521.

At September 30, 2014, the composition of gross unrealized appreciation (the excess of value over tax cost) and depreciation (the excess of tax cost over value) of investments on a tax basis was as follows:

As of September 30, 2014, there were no differences between book basis and tax basis.

8.) DISTRIBUTIONS TO SHAREHOLDERS
There were no distributions paid during the six month period ended September 30, 2014.

9.) CONTROL OWNERSHIP
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the Fund, under Section 2(a)(9) of the Investment Company Act of 1940. As of September 30, 2014, Ameritrade Inc. located at P.O. Box 2226, Omaha, Nebraska, for the benefit of its customers, held, in aggregate, 99.29% of the shares in the Fund. The Trust does not know whether the foregoing entities or any of the underlying beneficial holders owned or controlled 25% or more of the voting securities of the Fund.

2014 Semi-Annual Report 10

ADDITIONAL INFORMATION
September 30, 2014
(Unaudited)

1.) APPROVAL OF MANAGEMENT AGREEMENT BETWEEN THE TRUST AND NWM FUND GROUP, LLC ON BEHALF OF THE NWM MOMENTUM FUND
On March 5, 2014, the Board of Trustees (the "Board" or the "Trustees") considered the initial approval of the Management Agreement (the "Agreement") between the Trust and NWM Group, LLC ("NWM" or the "Adviser") on behalf of the NWM Momentum Fund (the "Fund"). In approving the Agreement, the Board of Trustees considered and evaluated the following factors: (i) the nature, extent and quality of the services to be provided by NWM to the Fund; (ii) the investment performance of the NWM and the Fund; (iii) the cost of the services to be provided and the profits to be realized by NWM and affiliates from the relationship with the Fund; (iv) the extent to which economies of scale will be realized as the Fund grows and whether the fee levels reflect these economies of scale to the benefit of shareholders; and (v) NWM's practices regarding possible conflicts of interest.

The Board then reviewed and discussed the approval of the Agreement between the Trust and NWM with respect to the Fund, as well as the amendments to the various proposed service agreements between the Trust and the service providers. The Board discussed the arrangements between NWM and the Trust with respect to the Fund. The Board reflected on its discussions with representatives of NWM regarding the proposed Agreement and the manner in which the Fund was to be managed. Counsel referred the Board to the Board Materials, which included, among other things, a memorandum from Counsel addressing the duties of Trustees regarding the approval of the proposed Agreement, a letter dated January 13, 2014 from Counsel to NWM and its respective responses thereto, a copy of its affiliate's financial statements, a letter of support, a copy of NWM's Form ADV, and a fee comparison analysis of the Fund and comparable mutual funds as of December 31, 2013. Counsel reviewed with the Board the memorandum from Counsel and the proposed Agreement and outlined the various factors the Board should consider in deciding whether to approve the Management Agreement.

The Board did not identify any particular information that was most relevant to its consideration to approve the Agreement and each Trustee may have afforded different weight to the various factors.

1. The nature, extent, and quality of the services to be provided by NWM. In this regard, the Board considered the responsibilities of NWM under the Management Agreement. The Board reviewed the services to be provided by NWM to the prospective Fund including, without limitation, the procedures for formulating investment recommendations and assuring compliance with the Fund's investment objectives and limitations; the efforts of NWM during the Fund's start-up phase, its coordination of services for the Fund among the service providers, and the anticipated efforts of NWM to promote the Fund and grow assets. The Board considered: NWM's staffing, personnel, and methods of operating; the education and experience of its personnel; and its compliance programs, policies, and procedures. After reviewing the foregoing and further information from NWM, the Board concluded that the quality, extent, and nature of the services to be provided by NWM was satisfactory and adequate for the Fund.

2. Investment Performance of the Fund and NWM. The Board noted that the Fund had not commenced operations and thus did not have investment performance information to review.

3. The costs of the services to be provided and profits to be realized by NWM from the relationship with the Fund. In this regard, the Board considered: the financial condition of NWM and its affiliate and the level of commitment to the Fund by NWM's principals; a letter of financial support from NWM's affiliate; the payment of startup costs for the Fund by NWM and its affiliate; the projected asset levels of the Fund; and the overall anticipated expenses of the Fund, including the expected nature and frequency of advisory fee payments. The Board also considered potential benefits for NWM in managing the Fund. The Board compared the expected fees and expenses of the Fund (including the advisory fee) to other funds comparable to it in terms of the type of fund, the style of investment management, the anticipated size of fund and the nature of the investment strategy and markets invested in, among other factors. The Board noted that the advisory fee payable to NWM under the proposed Management Agreement was on the higher-range of the peer group but the overall expense ratio was on the low end of the peer group. Based on estimated asset levels for the Fund, the Board observed that any anticipated profits to NWM were reasonable. The Board also determined that these advisory fees were within an acceptable range in light of the services to be rendered by NWM. In light of the obligation of NWM to assume most of the operational expenses of the Fund pursuant to a services agreement, the Board also determined that the overall fee arrangements for NWM with respect to the Fund were fair and reasonable. Following this comparison and upon further consideration and discussion of the foregoing, the Board concluded that the fees to be paid to NWM were fair and reasonable.

2014 Semi-Annual Report 11

Additional Information (Unaudited) - continued

4. The extent to which economies of scale would be realized as the Fund grows and whether advisory fee levels reflect these economies of scale for the benefit of the Fund's investors. In this regard, the Board considered the Fund's fee arrangements with NWM. The Board noted that the advisory fee would stay the same as asset levels increased, although it noted that under a Services Agreement, NWM was obligated to pay certain of the Fund's operating expenses which had the effect of limiting the overall fees paid by the Fund. Following further discussion of the Fund's projected asset levels, expectations for growth, and levels of fees, the Board determined that the Fund's fee arrangement with NWM was fair and reasonable and reasonable in relation to the nature and quality of the services to be provided by NWM.

5. Possible conflicts of interest and benefits to NWM. In evaluating the possibility for conflicts of interest, the Board considered such matters as: the experience and ability of the advisory personnel assigned to the Fund; the basis of decisions to buy or sell securities for the Fund; the method for bunching of portfolio securities transactions; the substance and administration of NWM's Code of Ethics and other relevant policies described in NWM's Form ADV. Following further consideration and discussion, the Board indicated that NWM's standards and practices relating to the identification and mitigation of potential conflicts of interest were satisfactory. The Trustees noted that NWM will only manage the Fund, but that its affiliated advisory firm may benefit from being able to direct smaller accounts to the Fund. It was noted that NWM does not anticipate utilizing soft dollars.

After further review and discussion, the Board determined that the fees to be paid to the Adviser pursuant to the Agreement, were reasonable, that the overall arrangements provided under the terms of the Agreement were reasonable and within a range of what could have been negotiated at arms-length in light of all surrounding circumstances, including such services to be rendered and such other matters as the Trustees considered to be relevant in the exercise of their reasonable business judgment.

Prior to the Fund's commencement of operations, a special meeting of the Board of Trustees was held to approve a new management agreement with the Fund's investment adviser, NWM, due to a proposed change to the investment advisory fee. The Board of Trustees voted to approve the new management agreement between the Trust and NWM on behalf of the Fund.

Counsel explained to the Board of Trustees that in light of certain business determinations made by NWM following the March 5, 2014 Board of Trustees meeting, a decision was made to reconsider the management fee for the Fund and to re-present the proposed investment management arrangements to the Board for its consideration.

The Board then reviewed and discussed the approval of the new management agreement (the "Agreement") between the Trust and NWM with respect to the Fund. The Board discussed the arrangements between NWM and the Trust with respect to the Fund. The Board reflected on its discussions with representatives of NWM at its March 5, 2014 meeting and at today's meeting regarding the proposed Agreement and the manner in which the Fund was to be managed. Counsel referred the Board to the Board Materials, which included, among other things, a memorandum from Counsel addressing the duties of Trustees regarding the approval of the proposed Agreement, a letter dated March 19, 2014 from Counsel to NWM and its respective responses thereto, a copy of its affiliate's financial statements, a letter of support, a copy of NWM's Form ADV, and a fee comparison analysis of the Fund and comparable mutual funds as of January 31, 2014. Counsel reviewed with the Board the memorandum from Counsel and the proposed Agreement and outlined the various factors the Board should consider in deciding whether to approve the Agreement. Counsel noted that the Board had previously determined that the proposed management fee was appropriate. Counsel noted that now the Board was being asked to consider a higher fee. noted that the Fund had not commenced operations and that NWM was now proposing a breakpoint schedule in the management fee that could be more beneficial than was previously put in place if assets in the Fund were to grow significantly. Counsel reminded the Board of the appropriate legal standards in considering investment advisory agreements.

The Board did not identify any particular information that was most relevant to its consideration to approve the Agreement and each Trustee may have afforded different weight to the various factors.

1. The nature, extent, and quality of the services to be provided by NWM. In this regard, the Board considered the responsibilities of NWM under the Management Agreement. The Board reviewed the services to be provided by NWM to the prospective Fund including, without limitation, the procedures for formulating investment recommendations and assuring compliance with the Fund's investment objectives and limitations; the efforts of NWM during the Fund's start-up phase, its coordination of services for the Fund among the service providers, and the anticipated efforts of NWM to promote the Fund and grow assets. The Board considered: NWM's staffing, personnel, and methods of operating; the education and experience of its personnel; and its com-

2014 Semi-Annual Report 12

Additional Information (Unaudited) - continued

pliance programs, policies, and procedures. After reviewing the foregoing and further information from NWM, the Board concluded that the quality, extent, and nature of the services to be provided by NWM was satisfactory and adequate for the Fund.

2. Investment Performance of the Fund and NWM. The Board noted that the Fund had not commenced operations and thus did not have investment performance information to review.

3. The costs of the services to be provided and profits to be realized by NWM from the relationship with the Fund. In this regard, the Board considered: the financial condition of NWM and its affiliate and the level of commitment to the Fund by NWM's principals; a letter of financial support from NWM's affiliate; NWM's payment of startup costs for the Fund; the projected asset levels of the Fund; and the overall anticipated expenses of the Fund, including the expected nature and frequency of advisory fee payments. The Board also considered potential benefits for NWM in managing the Fund. The Board compared the expected fees and expenses of the Fund (including the advisory fee) to other funds comparable to it in terms of the type of fund, the style of investment management, the anticipated size of Fund and the nature of the investment strategy and markets invested in, among other factors. The Board noted that the proposed advisory fee payable to NWM under the proposed Management Agreement was on the top end of the peer group, the net expense ratio of 1.95% was higher than the peer group average of 1.84%, and the gross expense ratio of 1.95% was lower than the peer group average of 2.23% . The Board noted that only one other fund group had a management fee that was slightly higher than that to be charged by NWM and another fund group had an identical management fee as that proposed by NWM. The Board also noted than 1/3 of the peer group had a net expense ratio higher than the Fund with the highest being 3.17% . After significant consideration and discussion of all of the surrounding circumstances and based on estimated asset levels for the Fund, the Board observed that any anticipated profits to NWM were reasonable. The Board also determined that these advisory fees were within an acceptable range in light of the services to be rendered by NWM. In light of the obligation of NWM to assume most of the operational expenses of the Fund pursuant to a services agreement, the Board also determined that the overall fee arrangements for NWM with respect to the Fund were fair and reasonable and probably made the comparisons to the other funds in its peer group less meaningful. Following this comparison and upon further consideration and discussion of the foregoing, the Board concluded that the fees to be paid to NWM were fair and reasonable.

4. The extent to which economies of scale would be realized as the Fund grows and whether advisory fee levels reflect these economies of scale for the benefit of the Fund's investors. In this regard, the Board considered the Fund's fee arrangements with NWM. The Board noted that the advisory fee now included breakpoints that were set a reasonable levels so as to allow for economies of scale to be recognized as Fund asset levels grow. The Board also noted that under a Services Agreement, NWM was obligated to pay certain of the Fund's operating expenses which had the effect of limiting the overall fees paid by the Fund. Following further discussion of the Fund's projected asset levels, expectations for growth, and levels of fees, the Board determined that the Fund's fee arrangement with NWM was fair and reasonable and reasonable in relation to the nature and quality of the services to be provided by NWM.

5. Possible conflicts of interest and benefits to NWM. In evaluating the possibility for conflicts of interest, the Board considered such matters as: the experience and ability of the advisory personnel assigned to the Fund; the basis of decisions to buy or sell securities for the Fund; the method for bunching of portfolio securities transactions; the substance and administration of NWM's Code of Ethics and other relevant policies described in NWM's Form ADV. The Board noted that unlike the original proposal that it considered, NWM's advisory affiliate would not assess separate account fees to clients that also invested in the Fund and the Board determined that this was appropriate. Following further consideration and discussion, the Board indicated that NWM's standards and practices relating to the identification and mitigation of potential conflicts of interest were satisfactory. The Trustees noted that NWM will only manage the Fund but that its affiliated advisory firm may benefit from being able to direct smaller accounts to the Fund. It was noted that NWM does not anticipate utilizing soft dollars.

After further review and discussion, the Board determined that the fees to be paid to the Adviser pursuant to the Agreement, were reasonable, that the overall arrangements provided under the terms of the Agreement were reasonable and within a range of what could have been negotiated at arms-length in light of all surrounding circumstances, including such services to be rendered and such other matters as the Trustees considered to be relevant in the exercise of their reasonable business judgment.

2014 Semi-Annual Report 13

NWM Momentum Fund
www.nwmfund.com
1-888-331-9609

Item 2. Code of Ethics. Not applicable.

Item 3. Audit Committee Financial Expert. Not applicable.

Item 4. Principal Accountant Fees and Services. Not applicable.

Item 5. Audit Committee of Listed Companies. Not applicable.

Item 6. Schedule of Investments. Not applicable. Schedule filed with Item 1.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable.

Item 8. Portfolio Managers of Closed End Funds. Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers. Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant’s board of trustees.

Item 11. Controls and Procedures.

(a) The Registrant’s president and chief financial officer concluded that the disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) were effective as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1) Code of Ethics. Not applicable.

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

(a)(3) Not applicable.

(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘N-CSRS’ Filing		Date		Other Filings
Filed on / Effective on:		12/5/14		N-CSRS
For Period End:		9/30/14		497J,  N-CSRS,  N-Q,  NSAR-A
		4/1/14		485BPOS,  497J,  N-CSR
		3/19/14
		3/5/14
		1/31/14		24F-2NT,  N-CSR,  N-CSRS,  NSAR-B
		1/13/14
		12/31/13		24F-2NT,  N-CSR,  N-CSRS,  N-Q,  NSAR-A,  NSAR-A/A,  NSAR-B
		3/5/10
		1/13/00
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Filing Submission 0001413042-14-000339   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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