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ACUITAS INTERNATIONAL SMALL CAP FUND
ACUITAS US MICROCAP FUND
SEMI-ANNUAL REPORT
December 31, 2019
(Unaudited)
Beginning on January 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds’ shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by contacting the Fund at (844) 805-5628, acuitas.ta@apexfs.com, or by contacting your financial intermediary directly.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by contacting the Fund at (844) 805-5628, acuitas.ta@apexfs.com, or by contacting your financial intermediary directly. Your election to receive reports in paper will apply to all of the Acuitas Funds.
TABLE OF CONTENTS
Acuitas International Small Cap Fund | |
Schedule of Investments | 1 |
Statement of Assets and Liabilities | 3 |
Statement of Operations | 4 |
Statements of Changes in Net Assets | 5 |
Financial Highlights | 6 |
Acuitas US Microcap Fund | |
Schedule of Investments | 7 |
Statement of Assets and Liabilities | 10 |
Statement of Operations | 11 |
Statements of Changes in Net Assets | 12 |
Financial Highlights | 13 |
Notes to Financial Statements | 14 |
Additional Information | 19 |
ACUITAS INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2019
Shares | Security Description | Value | ||||||
Common Stock - 79.9% | ||||||||
Australia - 8.1% | ||||||||
991 | ARB Corp., Ltd. | $ | 13,053 | |||||
3,625 | Bravura Solutions, Ltd. | 13,228 | ||||||
8,524 | Duxton Water, Ltd. | 8,614 | ||||||
6,068 | MNF Group, Ltd. | 21,036 | ||||||
3,117 | SmartGroup Corp., Ltd. | 15,180 | ||||||
8,243 | Western Areas, Ltd. | 17,527 | ||||||
88,638 | ||||||||
Austria - 3.8% | ||||||||
906 | FACC AG | 11,321 | ||||||
569 | Palfinger AG | 18,669 | ||||||
200 | Schoeller-Bleckmann Oilfield Equipment AG | 11,284 | ||||||
41,274 | ||||||||
Belgium - 1.5% | ||||||||
216 | Akka Technologies | 15,870 | ||||||
Canada - 4.8% | ||||||||
3,900 | Alithya Group, Inc., Class A (a) | 10,872 | ||||||
4,902 | EXFO, Inc. (a) | 22,650 | ||||||
1,593 | Extendicare, Inc. | 10,354 | ||||||
8,783 | Horizon North Logistics, Inc. | 8,319 | ||||||
52,195 | ||||||||
China - 0.8% | ||||||||
40,228 | Goodbaby International Holdings, Ltd. (a) | 8,931 | ||||||
Cyprus - 1.2% | ||||||||
5,144 | Atalaya Mining PLC (a) | 13,083 | ||||||
Finland - 0.7% | ||||||||
690 | Ferratum OYJ | 7,275 | ||||||
France - 5.7% | ||||||||
263 | Albioma SA | 7,670 | ||||||
182 | Devoteam SA | 19,292 | ||||||
1,382 | FIGEAC-AERO (a) | 14,417 | ||||||
455 | Lectra | 11,407 | ||||||
635 | Maisons du Monde SA (b) | 9,238 | ||||||
62,024 | ||||||||
Germany - 1.8% | ||||||||
711 | Flatex AG (a) | 19,540 | ||||||
Hong Kong - 0.8% | ||||||||
11,000 | Nissin Foods Co., Ltd. | 8,738 | ||||||
Ireland - 1.6% | ||||||||
10,695 | Hibernia REIT PLC | 16,915 | ||||||
Italy - 1.2% | ||||||||
949 | doValue SpA (b) | 13,093 | ||||||
Japan - 25.7% | ||||||||
280 | Anicom Holdings, Inc. | 9,496 | ||||||
129 | Digital Arts, Inc. | 6,625 | ||||||
284 | Hirata Corp. | 18,479 | ||||||
726 | Internet Initiative Japan, Inc. | 19,678 | ||||||
272 | Katitas Co., Ltd. | 12,054 | ||||||
479 | Makino Milling Machine Co., Ltd. | 22,130 | ||||||
385 | Mandom Corp. | 10,630 | ||||||
1,059 | Metaps, Inc. (a) | 8,460 | ||||||
788 | Nihon Chouzai Co., Ltd. | 27,668 | ||||||
652 | Nippon Ceramic Co., Ltd. | 16,292 | ||||||
1,091 | Optex Group Co., Ltd. | 16,618 | ||||||
1,781 | Poletowin Pitcrew Holdings, Inc. | 15,965 | ||||||
542 | Rakus Co., Ltd. | 9,981 | ||||||
665 | Taiyo Holdings Co., Ltd. | 27,266 | ||||||
207 | V Technology Co., Ltd. | 10,611 |
Shares | Security Description | Value | ||||||
Japan - 25.7% (continued) | ||||||||
3,443 | Yumeshin Holdings Co., Ltd. | $ | 28,107 | |||||
1,073 | Zojirushi Corp. | 20,323 | ||||||
280,383 | ||||||||
Luxembourg - 1.8% | ||||||||
1,767 | Solutions 30 SE (a) | 19,741 | ||||||
New Zealand - 1.4% | ||||||||
6,449 | Vista Group International, Ltd. | 15,629 | ||||||
Norway - 2.5% | ||||||||
1,003 | Norway Royal Salmon ASA | 27,328 | ||||||
Sweden - 3.1% | ||||||||
248 | BioGaia AB | 11,240 | ||||||
1,748 | Humana AB | 11,365 | ||||||
877 | Troax Group AB | 11,311 | ||||||
33,916 | ||||||||
Switzerland - 1.6% | ||||||||
368 | Lastminute.com NV (a) | 17,491 | ||||||
United Kingdom - 11.8% | ||||||||
1,300 | accesso Technology Group PLC (a) | 8,352 | ||||||
4,518 | Biffa PLC (b) | 16,398 | ||||||
7,046 | Clipper Logistics PLC | 26,856 | ||||||
470 | Craneware PLC | 16,062 | ||||||
1,539 | CVS Group PLC | 23,341 | ||||||
7,068 | The Gym Group PLC (b) | 27,057 | ||||||
2,333 | Urban & Civic PLC | 10,662 | ||||||
128,728 | ||||||||
Total Common Stock (Cost $799,488) | 870,792 | |||||||
Exchange Traded Funds - 9.0% | ||||||||
1,098 | iShares MSCI Emerging Markets Small-Cap ETF | 49,695 | ||||||
1,049 | SPDR S&P Emerging Markets SmallCap ETF | 48,317 | ||||||
Total Exchange Traded Funds (Cost $94,424) | 98,012 |
Shares | Security Description | Value | ||||
Money Market Fund - 5.6% | ||||||
60,771 | BlackRock Liquidity Funds FedFund Portfolio, Institutional Shares, 1.53% (c) | |||||
(Cost $60,771) | 60,771 | |||||
Investments, at value - 94.5% (Cost $954,683) | $ | 1,029,575 | ||||
Other Assets & Liabilities, Net - 5.5% | 59,850 | |||||
Net Assets - 100.0% | $ | 1,089,425 |
ETF | Exchange Traded Fund |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
(a) | Non-income producing security. |
(b) | Security exempt from registration under Rule 144A under the Securities Act of 1933. At the period end, the value of these securities amounted to $65,786 or 6.0% of net assets. |
(c) | Dividend yield changes daily to reflect current market conditions. Rate was the quoted yield as of December 31, 2019. |
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2019.
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in Note 2 of the accompanying Notes to Financial Statements.
See Notes to Financial Statements.
ACUITAS INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2019
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments at Value | ||||||||||||||||
Common Stock | ||||||||||||||||
Australia | $ | 88,638 | $ | – | $ | – | $ | 88,638 | ||||||||
Austria | 41,274 | – | – | 41,274 | ||||||||||||
Belgium | 15,870 | – | – | 15,870 | ||||||||||||
Canada | 52,195 | – | – | 52,195 | ||||||||||||
China | 8,931 | – | – | 8,931 | ||||||||||||
Cyprus | 13,083 | – | – | 13,083 | ||||||||||||
Finland | 7,275 | – | – | 7,275 | ||||||||||||
France | 62,024 | – | – | 62,024 | ||||||||||||
Germany | 19,540 | – | – | 19,540 | ||||||||||||
Hong Kong | 8,738 | – | – | 8,738 | ||||||||||||
Ireland | 16,915 | – | – | 16,915 | ||||||||||||
Italy | 13,093 | – | – | 13,093 | ||||||||||||
Japan | 280,383 | – | – | 280,383 | ||||||||||||
Luxembourg | 19,741 | – | – | 19,741 | ||||||||||||
New Zealand | 15,629 | – | – | 15,629 | ||||||||||||
Norway | 27,328 | – | – | 27,328 | ||||||||||||
Sweden | 33,916 | – | – | 33,916 | ||||||||||||
Switzerland | 17,491 | – | – | 17,491 | ||||||||||||
United Kingdom | 128,728 | – | – | 128,728 | ||||||||||||
Exchange Traded Funds | 98,012 | – | – | 98,012 | ||||||||||||
Money Market Fund | – | 60,771 | – | 60,771 | ||||||||||||
Investments at Value | $ | 968,804 | $ | 60,771 | $ | – | $ | 1,029,575 |
PORTFOLIO HOLDINGS | ||||
% of Total Investments | ||||
Australia | 8.6 | % | ||
Austria | 4.0 | % | ||
Belgium | 1.5 | % | ||
Canada | 5.1 | % | ||
China | 0.9 | % | ||
Cyprus | 1.3 | % | ||
Finland | 0.7 | % | ||
France | 6.0 | % | ||
Germany | 1.9 | % | ||
Hong Kong | 0.9 | % | ||
Ireland | 1.6 | % | ||
Italy | 1.3 | % | ||
Japan | 27.2 | % | ||
Luxembourg | 1.9 | % | ||
New Zealand | 1.5 | % | ||
Norway | 2.7 | % | ||
Sweden | 3.3 | % | ||
Switzerland | 1.7 | % | ||
United Kingdom | 12.5 | % | ||
Exchange Traded Funds | 9.5 | % | ||
Money Market Fund | 5.9 | % | ||
100.0 | % |
See Notes to Financial Statements.
ACUITAS INTERNATIONAL SMALL CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2019
ASSETS | ||||
Investments, at value (Cost $954,683) | $ | 1,029,575 | ||
Foreign currency (Cost $36,034) | 36,415 | |||
Receivables: | ||||
Dividends | 31,373 | |||
From investment adviser | 12,337 | |||
Prepaid expenses | 11,269 | |||
Total Assets | 1,120,969 | |||
LIABILITIES | ||||
Accrued Liabilities: | ||||
Trustees’ fees and expenses | 21 | |||
Fund services fees | 3,794 | |||
Other expenses | 27,729 | |||
Total Liabilities | 31,544 | |||
NET ASSETS | $ | 1,089,425 | ||
COMPONENTS OF NET ASSETS | ||||
Paid-in capital | $ | 5,745,288 | ||
Distributable earnings | (4,655,863 | ) | ||
NET ASSETS | $ | 1,089,425 | ||
SHARES OF BENEFICIAL INTEREST AT NO PAR VALUE (UNLIMITED SHARES AUTHORIZED) | ||||
Institutional Shares | 114,104 | |||
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE* | ||||
Institutional Shares (based on net assets of $1,089,425) | $ | 9.55 |
* | Shares redeemed or exchanged within 60 days of purchase are charged a 1.00% redemption fee. |
See Notes to Financial Statements.
ACUITAS INTERNATIONAL SMALL CAP FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 2019
INVESTMENT INCOME | ||||
Dividend income (Net of foreign withholding taxes of $1,482) | $ | 8,174 | ||
Total Investment Income | 8,174 | |||
EXPENSES | ||||
Investment adviser fees | 6,437 | |||
Fund services fees | 46,638 | |||
Custodian fees | 20,460 | |||
Registration fees | 9,607 | |||
Professional fees | 16,255 | |||
Trustees' fees and expenses | 1,488 | |||
Other expenses | 18,293 | |||
Total Expenses | 119,178 | |||
Fees waived | (111,132 | ) | ||
Net Expenses | 8,046 | |||
NET INVESTMENT INCOME | 128 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain on: | ||||
Investments | 17,996 | |||
Foreign currency transactions | 157 | |||
Net realized gain | 18,153 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 74,939 | |||
Foreign currency translations | (65 | ) | ||
Net change in unrealized appreciation (depreciation) | 74,874 | |||
NET REALIZED AND UNREALIZED GAIN | 93,027 | |||
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 93,155 |
See Notes to Financial Statements.
ACUITAS INTERNATIONAL SMALL CAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended December 31, 2019 | For the Year Ended June 30, 2019 | |||||||
OPERATIONS | ||||||||
Net investment income (loss) | $ | 128 | $ | (66,860 | ) | |||
Net realized gain (loss) | 18,153 | (3,892,509 | ) | |||||
Net change in unrealized appreciation (depreciation) | 74,874 | (2,053,480 | ) | |||||
Increase (Decrease) in Net Assets Resulting from Operations | 93,155 | (6,012,849 | ) | |||||
DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
Institutional Shares | – | (532,942 | ) | |||||
Total Distributions Paid | – | (532,942 | ) | |||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Sale of shares: | ||||||||
Institutional Shares | 18,570 | 2,914,159 | ||||||
Reinvestment of distributions: | ||||||||
Institutional Shares | – | 532,942 | ||||||
Redemption of shares: | ||||||||
Institutional Shares | (164,807 | ) | (43,757,828 | ) | ||||
Redemption fees: | ||||||||
Institutional Shares | – | 11 | ||||||
Decrease in Net Assets from Capital Share Transactions | (146,237 | ) | (40,310,716 | ) | ||||
Decrease in Net Assets | (53,082 | ) | (46,856,507 | ) | ||||
NET ASSETS | ||||||||
Beginning of Period | 1,142,507 | 47,999,014 | ||||||
End of Period | $ | 1,089,425 | $ | 1,142,507 | ||||
SHARE TRANSACTIONS | ||||||||
Sale of shares: | ||||||||
Institutional Shares | 2,083 | 316,012 | ||||||
Reinvestment of distributions: | ||||||||
Institutional Shares | – | 68,151 | ||||||
Redemption of shares: | ||||||||
Institutional Shares | (18,754 | ) | (4,974,594 | ) | ||||
Decrease in Shares | (16,671 | ) | (4,590,431 | ) |
See Notes to Financial Statements.
ACUITAS INTERNATIONAL SMALL CAP FUND
FINANCIAL HIGHLIGHTS
These financial highlights reflect selected data for a share outstanding throughout each period.
For the Years Ended June 30, | ||||||||||||||||||||||||
For the Six Months Ended December 31, | July 18, 2014 (a) Through | |||||||||||||||||||||||
2019 | 2019 | 2018 | 2017 | 2016 | June 30, 2015 | |||||||||||||||||||
INSTITUTIONAL SHARES | ||||||||||||||||||||||||
NET ASSET VALUE, Beginning of Period | $ | 8.74 | $ | 10.17 | $ | 10.11 | $ | 8.78 | $ | 9.79 | $ | 10.00 | ||||||||||||
INVESTMENT OPERATIONS | ||||||||||||||||||||||||
Net investment income (loss)(b) | 0.00 | (c) | (0.02 | ) | 0.08 | 0.09 | 0.12 | 0.08 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.81 | (1.29 | ) | 0.54 | 1.43 | (0.85 | ) | (0.27 | ) | |||||||||||||||
Total from Investment Operations | 0.81 | (1.31 | ) | 0.62 | 1.52 | (0.73 | ) | (0.19 | ) | |||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM | ||||||||||||||||||||||||
Net investment income | – | (0.12 | ) | (0.56 | ) | (0.19 | ) | (0.28 | ) | (0.02 | ) | |||||||||||||
Total Distributions to Shareholders | – | (0.12 | ) | (0.56 | ) | (0.19 | ) | (0.28 | ) | (0.02 | ) | |||||||||||||
REDEMPTION FEES(b) | – | 0.00 | (c) | 0.00 | (c) | 0.00 | (c) | 0.00 | (c) | 0.00 | (c) | |||||||||||||
NET ASSET VALUE, End of Period | $ | 9.55 | $ | 8.74 | $ | 10.17 | $ | 10.11 | $ | 8.78 | $ | 9.79 | ||||||||||||
TOTAL RETURN | 9.27 | %(d) | (12.76 | )% | 5.94 | % | 17.57 | % | (7.57 | )% | (1.91 | )%(d) | ||||||||||||
RATIOS/SUPPLEMENTARY DATA | ||||||||||||||||||||||||
Net Assets at End of Period (000s omitted) | $ | 1,089 | $ | 1,143 | $ | 47,999 | $ | 46,340 | $ | 42,674 | $ | 46,653 | ||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||
Net investment income (loss) | 0.02 | %(e) | (0.23 | )% | 0.77 | % | 0.91 | % | 1.35 | % | 0.91 | %(e) | ||||||||||||
Net expenses | 1.50 | %(e) | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | %(e) | ||||||||||||
Gross expenses (f) | 22.22 | %(e) | 2.43 | % | 1.99 | % | 2.04 | % | 2.15 | % | 2.40 | %(e) | ||||||||||||
PORTFOLIO TURNOVER RATE | 21 | %(d) | 246 | % | 144 | % | 105 | % | 104 | % | 112 | %(d) |
(a) | Commencement of operations. |
(b) | Calculated based on average shares outstanding during each period. |
(c) | Less than $0.01 per share. |
(d) | Not annualized. |
(e) | Annualized. |
(f) | Reflects the expense ratio excluding any waivers and/or reimbursements. |
See Notes to Financial Statements.
ACUITAS US MICROCAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2019
Shares | Security Description | Value | ||||||
Common Stock - 97.4% | ||||||||
Consumer Discretionary - 9.1% | ||||||||
41,400 | American Outdoor Brands Corp. (a) | $ | 384,192 | |||||
47,945 | Aspen Group, Inc. (a) | 383,560 | ||||||
16,434 | BJ's Restaurants, Inc. | 623,835 | ||||||
22,126 | Carriage Services, Inc. | 566,426 | ||||||
27,910 | Chuy's Holdings, Inc. (a) | 723,427 | ||||||
44,900 | Full House Resorts, Inc. (a) | 150,415 | ||||||
30,351 | Interface, Inc. | 503,523 | ||||||
6,713 | Kura Sushi USA, Inc., Class A (a) | 170,846 | ||||||
4,800 | M/I Homes, Inc. (a) | 188,880 | ||||||
31,079 | QuinStreet, Inc. (a) | 475,819 | ||||||
44,010 | Rosetta Stone, Inc. (a) | 798,341 | ||||||
14,200 | Select Interior Concepts, Inc., Class A (a) | 127,658 | ||||||
70,590 | Sportsman's Warehouse Holdings, Inc. (a) | 566,838 | ||||||
40,210 | Universal Technical Institute, Inc. (a) | 310,019 | ||||||
6,692 | Winmark Corp. | 1,327,024 | ||||||
7,300,803 | ||||||||
Consumer Staples - 0.3% | ||||||||
5,500 | Seneca Foods Corp., Class A (a) | 224,345 | ||||||
Energy - 4.3% | ||||||||
82,283 | Amplify Energy Corp. | 543,891 | ||||||
357,724 | HighPoint Resources Corp. (a) | 604,554 | ||||||
48,339 | Natural Gas Services Group, Inc. (a) | 592,636 | ||||||
47,510 | Par Pacific Holdings, Inc. (a) | 1,104,132 | ||||||
151,528 | Rosehill Resources, Inc. (a) | 193,956 | ||||||
41,000 | SunCoke Energy, Inc. | 255,430 | ||||||
30,400 | W&T Offshore, Inc. (a) | 169,024 | ||||||
3,463,623 | ||||||||
Financial Services - 18.6% | ||||||||
61,700 | Ashford Hospitality Trust, Inc. REIT | 172,143 | ||||||
22,500 | B. Riley Financial, Inc. | 566,550 | ||||||
17,526 | Braemar Hotels & Resorts, Inc. REIT | 156,507 | ||||||
22,580 | Bryn Mawr Bank Corp. | 931,199 | ||||||
10,100 | Central Valley Community Bancorp | 218,867 | ||||||
4,900 | Community Healthcare Trust, Inc. REIT | 210,014 | ||||||
12,100 | ConnectOne Bancorp, Inc. | 311,212 | ||||||
14,900 | Customers Bancorp, Inc. (a) | 354,769 | ||||||
53,350 | Donnelley Financial Solutions, Inc. (a) | 558,574 | ||||||
10,200 | Ellington Financial, Inc. | 186,966 | ||||||
9,800 | Enterprise Financial Services Corp. | 472,458 | ||||||
49,157 | Everi Holdings, Inc. (a) | 660,179 | ||||||
12,800 | Financial Institutions, Inc. | 410,880 | ||||||
19,100 | First Defiance Financial Corp. | 601,459 | ||||||
10,000 | First Foundation, Inc. | 174,000 | ||||||
11,500 | First Internet Bancorp | 272,665 | ||||||
9,700 | Flushing Financial Corp. | 209,569 | ||||||
39,550 | Fortress Transportation & Infrastructure Investors, LLC | 772,807 | ||||||
7,000 | FS Bancorp, Inc. | 446,530 | ||||||
32,400 | Global Medical REIT, Inc. | 428,652 | ||||||
66,729 | Great Elm Capital Corp. | 519,180 | ||||||
22,200 | Hallmark Financial Services, Inc. (a) | 390,054 | ||||||
44,843 | HarborOne Bancorp, Inc. (a) | 492,825 | ||||||
19,150 | Horizon Bancorp, Inc. | 363,850 | ||||||
5,600 | I3 Verticals, Inc., Class A (a) | 158,200 | ||||||
20,000 | Luther Burbank Corp. | 230,600 | ||||||
22,519 | Midland States Bancorp, Inc. | 652,150 | ||||||
15,423 | NMI Holdings, Inc., Class A (a) | 511,735 | ||||||
25,940 | Northrim BanCorp, Inc. | 993,502 | ||||||
38,300 | On Deck Capital, Inc. (a) | 158,562 | ||||||
24,600 | OP Bancorp | 255,102 | ||||||
17,298 | Plymouth Industrial REIT, Inc. | 318,110 | ||||||
13,287 | Premier Financial Bancorp, Inc. | 241,026 |
Shares | Security Description | Value | ||||||
Financial Services - 18.6% (continued) | ||||||||
38,600 | Pzena Investment Management, Inc., | |||||||
Class A | $ | 332,732 | ||||||
16,700 | RBB Bancorp | 353,539 | ||||||
12,154 | Ready Capital Corp. REIT | 187,415 | ||||||
15,400 | The First of Long Island Corp. | 386,232 | ||||||
2,200 | Virtus Investment Partners, Inc. | 267,784 | ||||||
14,928,598 | ||||||||
Health Care - 19.4% | ||||||||
35,000 | Akebia Therapeutics, Inc. (a) | 221,200 | ||||||
32,109 | Alphatec Holdings, Inc. (a) | 227,813 | ||||||
10,500 | AngioDynamics, Inc. (a) | 168,105 | ||||||
4,000 | Anika Therapeutics, Inc. (a) | 207,400 | ||||||
28,143 | Apollo Endosurgery, Inc. (a) | 80,207 | ||||||
17,080 | AtriCure, Inc. (a) | 555,271 | ||||||
168,727 | Avid Bioservices, Inc. (a) | 1,294,136 | ||||||
96,900 | BioDelivery Sciences International, Inc. (a) | 612,408 | ||||||
17,048 | BioLife Solutions, Inc. (a) | 275,837 | ||||||
3,400 | BioSpecifics Technologies Corp. (a) | 193,596 | ||||||
14,194 | Cardiovascular Systems, Inc. (a) | 689,686 | ||||||
55,300 | Catalyst Pharmaceuticals, Inc. (a) | 207,375 | ||||||
22,800 | Champions Oncology, Inc. (a) | 189,924 | ||||||
12,901 | Chembio Diagnostics, Inc. (a) | 58,829 | ||||||
11,500 | Codexis, Inc. (a) | 183,885 | ||||||
14,000 | Collegium Pharmaceutical, Inc. (a) | 288,120 | ||||||
15,800 | Cytokinetics, Inc. (a) | 167,638 | ||||||
19,400 | Dicerna Pharmaceuticals, Inc. (a) | 427,382 | ||||||
21,442 | Electromed, Inc. (a) | 185,473 | ||||||
16,900 | Fulgent Genetics, Inc. (a) | 218,010 | ||||||
57,100 | Harvard Bioscience, Inc. (a) | 174,155 | ||||||
17,943 | IntriCon Corp. (a) | 322,974 | ||||||
11,000 | Kura Oncology, Inc. (a) | 151,250 | ||||||
23,800 | Lannett Co., Inc. (a) | 209,916 | ||||||
14,000 | MacroGenics, Inc. (a) | 152,320 | ||||||
81,300 | MEI Pharma, Inc. (a) | 201,624 | ||||||
46,720 | MiMedx Group, Inc. (a) | 354,138 | ||||||
12,768 | Misonix, Inc. (a) | 237,612 | ||||||
13,000 | Molecular Templates, Inc. (a) | 181,805 | ||||||
23,142 | NeoGenomics, Inc. (a) | 676,903 | ||||||
10,599 | Optinose, Inc. (a) | 97,723 | ||||||
174,200 | Palatin Technologies, Inc. (a) | 136,259 | ||||||
43,822 | Pfenex, Inc. (a) | 481,166 | ||||||
37,033 | Quotient, Ltd. (a) | 352,184 | ||||||
47,774 | R1 RCM, Inc. (a) | 620,106 | ||||||
9,900 | RadNet, Inc. (a) | 200,970 | ||||||
26,986 | SeaSpine Holdings Corp. (a) | 324,102 | ||||||
69,124 | Sientra, Inc. (a) | 617,969 | ||||||
192,040 | SIGA Technologies, Inc. (a) | 916,031 | ||||||
27,552 | STAAR Surgical Co. (a) | 969,004 | ||||||
12,800 | Triple-S Management Corp., Class B (a) | 236,672 | ||||||
13,800 | Vanda Pharmaceuticals, Inc. (a) | 226,458 | ||||||
12,041 | Veracyte, Inc. (a) | 336,185 | ||||||
15,460 | Vericel Corp. (a) | 269,004 | ||||||
36,473 | ViewRay, Inc. (a) | 153,916 | ||||||
15,700 | X4 Pharmaceuticals, Inc. (a) | 167,990 | ||||||
9,400 | XBiotech, Inc. (a) | 175,451 | ||||||
8,656 | Xenon Pharmaceuticals, Inc. (a) | 113,480 | ||||||
15,509,662 | ||||||||
Materials & Processing - 9.6% | ||||||||
22,979 | AdvanSix, Inc. (a) | 458,661 | ||||||
20,036 | BlueLinx Holdings, Inc. (a) | 285,513 | ||||||
7,010 | Chase Corp. | 830,545 | ||||||
17,200 | Foundation Building Materials, Inc. (a) | 332,820 | ||||||
7,100 | Griffon Corp. | 144,343 |
See Notes to Financial Statements.
ACUITAS US MICROCAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2019
Shares | Security Description | Value | ||||||
Materials & Processing - 9.6% (continued) | ||||||||
18,163 | Insteel Industries, Inc. | $ | 390,323 | |||||
85,799 | Landec Corp. (a) | 970,387 | ||||||
4,600 | Lawson Products, Inc. (a) | 239,660 | ||||||
9,100 | LB Foster Co., Class A (a) | 176,358 | ||||||
28,400 | NN, Inc. | 262,700 | ||||||
32,309 | Northern Technologies International Corp. | 454,264 | ||||||
22,782 | Northwest Pipe Co. (a) | 758,868 | ||||||
15,790 | Orion Engineered Carbons SA | 304,747 | ||||||
35,132 | UFP Technologies, Inc. (a) | 1,742,898 | ||||||
91,725 | Venator Materials PLC (a) | 351,307 | ||||||
7,703,394 | ||||||||
Producer Durables - 19.7% | ||||||||
13,478 | Allied Motion Technologies, Inc. | 653,683 | ||||||
21,410 | Argan, Inc. | 859,397 | ||||||
11,500 | Atkore International Group, Inc. (a) | 465,290 | ||||||
2,829 | Barrett Business Services, Inc. | 255,911 | ||||||
8,700 | Canadian Solar, Inc. (a) | 192,270 | ||||||
23,882 | Columbus McKinnon Corp. | 955,996 | ||||||
26,500 | Commercial Vehicle Group, Inc. (a) | 168,275 | ||||||
17,283 | CRA International, Inc. | 941,405 | ||||||
38,700 | DHT Holdings, Inc. | 320,436 | ||||||
6,860 | Ducommun, Inc. (a) | 346,636 | ||||||
10,160 | Energy Recovery, Inc. (a) | 99,466 | ||||||
13,148 | GP Strategies Corp. (a) | 173,948 | ||||||
95,047 | Great Lakes Dredge & Dock Corp. (a) | 1,076,883 | ||||||
73,486 | Hill International, Inc. (a) | 232,216 | ||||||
7,254 | ICF International, Inc. | 664,611 | ||||||
54,994 | IES Holdings, Inc. (a) | 1,411,145 | ||||||
10,316 | Kornit Digital, Ltd. (a) | 353,117 | ||||||
22,700 | Limbach Holdings, Inc. (a) | 85,806 | ||||||
13,604 | Patriot Transportation Holding, Inc. (a) | 265,006 | ||||||
54,981 | Perceptron, Inc. (a) | 302,395 | ||||||
8,300 | Powell Industries, Inc. | 406,617 | ||||||
115,549 | Radiant Logistics, Inc. (a) | 643,608 | ||||||
8,000 | SP Plus Corp. (a) | 339,440 | ||||||
11,600 | Sterling Construction Co., Inc. (a) | 163,328 | ||||||
20,010 | Systemax, Inc. | 503,452 | ||||||
11,650 | Teekay Tankers, Ltd., Class A (a) | 279,251 | ||||||
77,235 | The Hackett Group, Inc. | 1,246,573 | ||||||
25,144 | The Manitowoc Co., Inc. (a) | 440,020 | ||||||
22,400 | Titan Machinery, Inc. (a) | 331,072 | ||||||
13,029 | TransAct Technologies, Inc. | 142,928 | ||||||
15,100 | Tutor Perini Corp. (a) | 194,186 | ||||||
8,700 | Vectrus, Inc. (a) | 445,962 | ||||||
9,962 | Vishay Precision Group, Inc. (a) | 338,708 | ||||||
4,500 | VSE Corp. | 171,180 | ||||||
12,800 | Wabash National Corp. | 188,032 | ||||||
62,600 | Westport Fuel Systems, Inc. (a) | 148,362 | ||||||
15,806,611 | ||||||||
Technology - 16.4% | ||||||||
13,937 | Adesto Technologies Corp. (a) | 118,464 | ||||||
13,135 | AstroNova, Inc. | 180,212 | ||||||
17,650 | CalAmp Corp. (a) | 169,087 | ||||||
6,000 | CEVA, Inc. (a) | 161,760 | ||||||
19,361 | Cohu, Inc. | 442,399 | ||||||
50,500 | Digital Turbine, Inc. (a) | 360,065 | ||||||
64,156 | eGain Corp. (a) | 508,116 | ||||||
8,957 | Five9, Inc. (a) | 587,400 | ||||||
32,668 | Ichor Holdings, Ltd. (a) | 1,086,864 | ||||||
18,700 | Kimball Electronics, Inc. (a) | 328,185 | ||||||
64,876 | Leaf Group, Ltd. (a) | 259,504 | ||||||
117,797 | Limelight Networks, Inc. (a) | 480,612 | ||||||
34,500 | MagnaChip Semiconductor Corp. (a) | 400,545 |
Shares | Security Description | Value | ||||||
Technology - 16.4% (continued) | ||||||||
12,847 | Medallia, Inc. (a) | $ | 399,670 | |||||
9,100 | Methode Electronics, Inc. | 358,085 | ||||||
54,929 | MiX Telematics, Ltd., ADR | 712,429 | ||||||
22,638 | Perficient, Inc. (a) | 1,042,933 | ||||||
68,263 | Photronics, Inc. (a) | 1,075,825 | ||||||
30,463 | PlayAGS, Inc. (a) | 369,516 | ||||||
18,914 | QAD, Inc., Class A | 963,290 | ||||||
75,729 | Qumu Corp. (a) | 197,653 | ||||||
11,429 | Red Violet, Inc. (a) | 211,551 | ||||||
23,000 | Sapiens International Corp. NV | 529,000 | ||||||
62,100 | Seachange International, Inc. (a) | 260,199 | ||||||
5,000 | SMART Global Holdings, Inc. (a) | 189,700 | ||||||
33,906 | Telaria, Inc. (a) | 298,712 | ||||||
34,400 | The Rubicon Project, Inc. (a) | 280,704 | ||||||
18,300 | Ultra Clean Holdings, Inc. (a) | 429,501 | ||||||
14,271 | Upland Software, Inc. (a) | 509,617 | ||||||
14,500 | Veeco Instruments, Inc. (a) | 212,933 | ||||||
13,124,531 | ||||||||
Total Common Stock (Cost $68,244,016) | 78,061,567 |
Shares | Security Description | Value | ||||||
Money Market Fund - 2.7% | ||||||||
2,194,103 | BlackRock Liquidity Funds FedFund | |||||||
Portfolio, Institutional Shares, 1.53% (b) | ||||||||
(Cost $2,194,103) | 2,194,103 | |||||||
Investments, at value - 100.1% (Cost $70,438,119) | $ | 80,255,670 | ||||||
Other Assets & Liabilities, Net - (0.1)% | (89,268 | ) | ||||||
Net Assets - 100.0% | $ | 80,166,402 |
ADR | American Depositary Receipt |
LLC | Limited Liability Company |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
(a) | Non-income producing security. |
(b) | Dividend yield changes daily to reflect current market conditions. Rate was the quoted yield as of December 31, 2019. |
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2019.
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in Note 2 of the accompanying Notes to Financial Statements.
Valuation Inputs | Investments in Securities | |||
Level 1 - Quoted Prices | $ | 78,061,567 | ||
Level 2 - Other Significant Observable Inputs | 2,194,103 | |||
Level 3 - Significant Unobservable Inputs | – | |||
Total | $ | 80,255,670 |
The Level 1 value displayed in this table is Common Stock. The Level 2 value displayed in this table is a Money Market Fund. Refer to this Schedule of Investments for a further breakout of each security by industry.
See Notes to Financial Statements.
ACUITAS US MICROCAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2019
PORTFOLIO HOLDINGS | ||
% of Total Investments | ||
Consumer Discretionary | 9.1% | |
Consumer Staples | 0.3% | |
Energy | 4.3% | |
Financial Services | 18.6% | |
Health Care | 19.3% | |
Materials & Processing | 9.6% | |
Producer Durables | 19.7% | |
Technology | 16.4% | |
Money Market Fund | 2.7% | |
100.0% |
See Notes to Financial Statements.
ACUITAS US MICROCAP FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2019
ASSETS | ||||
Investments, at value (Cost $70,438,119) | $ | 80,255,670 | ||
Receivables: | ||||
Fund shares sold | 15,586 | |||
Investment securities sold | 100,526 | |||
Dividends | 60,705 | |||
Prepaid expenses | 15,553 | |||
Total Assets | 80,448,040 | |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 138,245 | |||
Fund shares redeemed | 24,237 | |||
Accrued Liabilities: | ||||
Investment adviser fees | 78,442 | |||
Trustees’ fees and expenses | 1,197 | |||
Fund services fees | 15,685 | |||
Other expenses | 23,832 | |||
Total Liabilities | 281,638 | |||
NET ASSETS | $ | 80,166,402 | ||
COMPONENTS OF NET ASSETS | ||||
Paid-in capital | $ | 73,036,270 | ||
Distributable earnings | 7,130,132 | |||
NET ASSETS | $ | 80,166,402 | ||
SHARES OF BENEFICIAL INTEREST AT NO PAR VALUE (UNLIMITED SHARES AUTHORIZED) | ||||
Institutional Shares | 7,274,619 | |||
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE* | ||||
Institutional Shares (based on net assets of $80,166,402) | $ | 11.02 |
* | Shares redeemed or exchanged within 60 days of purchase are charged a 1.00% redemption fee. |
See Notes to Financial Statements.
ACUITAS US MICROCAP FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 2019
INVESTMENT INCOME | ||||
Dividend income (Net of foreign withholding taxes of $3,730) | $ | 431,749 | ||
Total Investment Income | 431,749 | |||
EXPENSES | ||||
Investment adviser fees | 540,421 | |||
Fund services fees | 97,825 | |||
Shareholder service fees | 38,182 | |||
Custodian fees | 12,585 | |||
Registration fees | 9,999 | |||
Professional fees | 21,708 | |||
Trustees' fees and expenses | 7,776 | |||
Other expenses | 25,354 | |||
Total Expenses | 753,850 | |||
Fees waived | (97,838 | ) | ||
Net Expenses | 656,012 | |||
NET INVESTMENT LOSS | (224,263 | ) | ||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain on: | ||||
Investments | 873,441 | |||
Foreign currency transactions | 41 | |||
Net realized gain | 873,482 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 6,605,082 | |||
Foreign currency translations | (9 | ) | ||
Net change in unrealized appreciation (depreciation) | 6,605,073 | |||
NET REALIZED AND UNREALIZED GAIN | 7,478,555 | |||
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 7,254,292 |
See Notes to Financial Statements.
ACUITAS US MICROCAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended December 31, 2019 | For the Year Ended June 30, 2019 | |||||||
OPERATIONS | ||||||||
Net investment loss | $ | (224,263 | ) | $ | (721,019 | ) | ||
Net realized gain | 873,482 | 6,624,145 | ||||||
Net change in unrealized appreciation (depreciation) | 6,605,073 | (17,327,014 | ) | |||||
Increase (Decrease) in Net Assets Resulting from Operations | 7,254,292 | (11,423,888 | ) | |||||
DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
Institutional Shares | (76,614 | ) | (16,940,075 | ) | ||||
Total Distributions Paid | (76,614 | ) | (16,940,075 | ) | ||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Sale of shares: | ||||||||
Institutional Shares | 2,458,996 | 17,861,183 | ||||||
Reinvestment of distributions: | ||||||||
Institutional Shares | 76,603 | 16,893,918 | ||||||
Redemption of shares: | ||||||||
Institutional Shares | (7,210,881 | ) | (37,069,514 | ) | ||||
Redemption fees: | ||||||||
Institutional Shares | 887 | 2,330 | ||||||
Decrease in Net Assets from Capital Share Transactions | (4,674,395 | ) | (2,312,083 | ) | ||||
Increase (Decrease) in Net Assets | 2,503,283 | (30,676,046 | ) | |||||
NET ASSETS | ||||||||
Beginning of Period | 77,663,119 | 108,339,165 | ||||||
End of Period | $ | 80,166,402 | $ | 77,663,119 | ||||
SHARE TRANSACTIONS | ||||||||
Sale of shares: | ||||||||
Institutional Shares | 244,036 | 1,699,846 | ||||||
Reinvestment of distributions: | ||||||||
Institutional Shares | 7,073 | 1,799,139 | ||||||
Redemption of shares: | ||||||||
Institutional Shares | (706,491 | ) | (3,412,468 | ) | ||||
Increase (Decrease) in Shares | (455,382 | ) | 86,517 |
See Notes to Financial Statements.
ACUITAS US MICROCAP FUND
FINANCIAL HIGHLIGHTS
These financial highlights reflect selected data for a share outstanding throughout each period.
For the Years Ended June 30, | ||||||||||||||||||||||||
For the Six Months Ended December 31, 2019 | 2019 | 2018 | 2017 | 2016 | July 18, 2014 (a) Through June 30, 2015 | |||||||||||||||||||
INSTITUTIONAL SHARES | ||||||||||||||||||||||||
NET ASSET VALUE, Beginning of Period | $ | 10.05 | $ | 14.17 | $ | 12.57 | $ | 10.38 | $ | 11.27 | $ | 10.00 | ||||||||||||
INVESTMENT OPERATIONS | ||||||||||||||||||||||||
Net investment loss (b) | (0.03 | ) | (0.09 | ) | (0.12 | ) | (0.09 | ) | (0.08 | ) | (0.07 | ) | ||||||||||||
Net realized and unrealized gain (loss) | 1.01 | (1.46 | ) | 2.19 | 2.39 | (0.41 | ) | 1.34 | ||||||||||||||||
Total from Investment Operations | 0.98 | (1.55 | ) | 2.07 | 2.30 | (0.49 | ) | 1.27 | ||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM | ||||||||||||||||||||||||
Net realized gain | (0.01 | ) | (2.57 | ) | (0.47 | ) | (0.11 | ) | (0.40 | ) | – | |||||||||||||
Total Distributions to Shareholders | (0.01 | ) | (2.57 | ) | (0.47 | ) | (0.11 | ) | (0.40 | ) | – | |||||||||||||
REDEMPTION FEES(b) | 0.00 | (c) | 0.00 | (c) | 0.00 | (c) | 0.00 | (c) | 0.00 | (c) | 0.00 | (c) | ||||||||||||
NET ASSET VALUE, End of Period | $ | 11.02 | $ | 10.05 | $ | 14.17 | $ | 12.57 | $ | 10.38 | $ | 11.27 | ||||||||||||
TOTAL RETURN | 9.76 | %(d) | (9.68 | )% | 16.77 | % | 22.21 | % | (4.27 | )% | 12.70 | %(d) | ||||||||||||
RATIOS/SUPPLEMENTARY DATA | ||||||||||||||||||||||||
Net Assets at End of Period (000s omitted) | $ | 80,166 | $ | 77,663 | $ | 108,339 | $ | 87,690 | $ | 66,156 | $ | 37,823 | ||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||
Net investment loss | (0.58 | )%(e) | (0.78 | )% | (0.91 | )% | (0.78 | )% | (0.80 | )% | (0.74 | )%(e) | ||||||||||||
Net expenses | 1.70 | %(e) | 1.70 | % | 1.70 | % | 1.70 | % | 1.70 | % | 1.70 | %(e) | ||||||||||||
Gross expenses (f) | 1.95 | %(e) | 1.87 | % | 1.80 | % | 1.86 | % | 2.04 | % | 2.37 | %(e) | ||||||||||||
PORTFOLIO TURNOVER RATE | 27 | %(d) | 108 | % | 48 | % | 50 | % | 52 | % | 58 | %(d) |
(a) | Commencement of operations. |
(b) | Calculated based on average shares outstanding during each period. |
(c) | Less than $0.01 per share. |
(d) | Not annualized. |
(e) | Annualized. |
(f) | Reflects the expense ratio excluding any waivers and/or reimbursements. |
See Notes to Financial Statements.
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Note 1. Organization
Acuitas International Small Cap Fund and Acuitas US Microcap Fund (individually, a “Fund” and collectively, the “Funds”) are diversified portfolios of Forum Funds II (the “Trust”). The Trust is a Delaware statutory trust that is registered as an open-end, management investment company under the Investment Company Act of 1940, as amended (the “Act”). Under its Trust Instrument, the Trust is authorized to issue an unlimited number of each Fund’s shares of beneficial interest without par value. Each Fund currently offers two classes of shares: Institutional Shares and Investors Shares. As of December 31, 2019, Investor Shares had not commenced operations. Each Fund seeks capital appreciation. Each Fund commenced operations on July 18, 2014.
Note 2. Summary of Significant Accounting Policies
The Funds are investment companies and follow accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services – Investment Companies.” These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of increases and decreases in net assets from operations during the fiscal period. Actual amounts could differ from those estimates. The following summarizes the significant accounting policies of each Fund:
Security Valuation – Securities are valued at market prices using the last quoted trade or official closing price from the principal exchange where the security is traded, as provided by independent pricing services on each Fund business day. In the absence of a last trade, securities are valued at the mean of the last bid and ask price provided by the pricing service. Forward currency contracts are generally valued based on interpolation of forward curve data points obtained from major banking institutions that deal in foreign currencies and currency dealers. Exchange-traded options for which the last quoted sale price is outside the closing bid and ask price will be valued at the mean of the closing bid and ask price. Shares of non-exchange traded open-end mutual funds are valued at net asset value (“NAV”). Short-term investments that mature in sixty days or less may be valued at amortized cost.
Each Fund values its investments at fair value pursuant to procedures adopted by the Trust’s Board of Trustees (the”Board”) if (1) market quotations are not readily available or (2) the Adviser, as defined in Note 3, believes that the values available are unreliable. The Trust’s Valuation Committee, as defined in each Fund’s registration statement, performs certain functions as they relate to the administration and oversight of each Fund’s valuation procedures. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such investments and considers a number of factors, including valuation methodologies and significant unobservable inputs, when arriving at fair value.
The Valuation Committee may work with the Adviser to provide valuation inputs. In determining fair valuations, inputs may include market-based analytics that may consider related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant investment information. Adviser inputs may include an income-based approach in which the anticipated future cash flows of the investment are discounted in determining fair value. Discounts may also be applied based on the nature or duration of any restrictions on the disposition of the investments. The Valuation Committee performs regular reviews of valuation methodologies, key inputs and assumptions, disposition analysis and market activity.
Fair valuation is based on subjective factors and, as a result, the fair value price of an investment may differ from the security’s market price and may not be the price at which the asset may be sold. Fair valuation could result in a different NAV than a NAV determined by using market quotes.
GAAP has a three-tier fair value hierarchy. The basis of the tiers is dependent upon the various “inputs” used to determine the value of each Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1 - Quoted prices in active markets for identical assets and liabilities.
Level 2 - Prices determined using significant other observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Short-term securities with maturities of sixty days or less are valued at amortized cost, which approximates market value, and are categorized as Level 2 in the hierarchy. Municipal securities, long-term U.S. government obligations and corporate debt securities are valued in accordance with the evaluated price supplied by a pricing service and
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
generally categorized as Level 2 in the hierarchy. Other securities that are categorized as Level 2 in the hierarchy include, but are not limited to, warrants that do not trade on an exchange, securities valued at the mean between the last reported bid and ask quotation and international equity securities valued by an independent third party with adjustments for changes in value between the time of the securities’ respective local market closes and the close of the U.S. market.
Level 3 - Significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments).
The aggregate value by input level, as of December 31, 2019, for each Fund’s investments is included at the end of each Fund’s Schedule of Investments.
Security Transactions, Investment Income and Realized Gain and Loss – Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as possible after determining the existence of a dividend declaration after exercising reasonable due diligence. Income and capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable. Interest income is recorded on an accrual basis. Premium is amortized and discount is accreted using the effective interest method. Identified cost of investments sold is used to determine the gain and loss for both financial statement and federal income tax purposes.
Foreign Currency Translations – Foreign currency amounts are translated into U.S. dollars as follows: (1) assets and liabilities at the rate of exchange at the end of the respective period; and (2) purchases and sales of securities and income and expenses at the rate of exchange prevailing on the dates of such transactions. The portion of the results of operations arising from changes in the exchange rates and the portion due to fluctuations arising from changes in the market prices of securities are not isolated. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Foreign Currency Transactions – The Acuitas International Small Cap Fund may enter into transactions to purchase or sell foreign currency contracts and options on foreign currency. Forward currency contracts are agreements to exchange one currency for another at a future date and at a specified price. A fund may use forward currency contracts to facilitate transactions in foreign securities, to manage a fund’s foreign currency exposure and to protect the U.S. dollar value of its underlying portfolio securities against the effect of possible adverse movements in foreign exchange rates. These contracts are intrinsically valued daily based on forward rates, and a fund’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is recorded as a component of NAV. These instruments involve market risk, credit risk, or both kinds of risks, in excess of the amount recognized in the Statements of Assets and Liabilities. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movement in currency and securities values and interest rates. Due to the risks associated with these transactions, a fund could incur losses up to the entire contract amount, which may exceed the net unrealized value included in its NAV.
Distributions to Shareholders – Each Fund declares any dividends from net investment income and pays them annually. Any net capital gains realized by the Funds are distributed at least annually. Distributions to shareholders are recorded on the ex-dividend date. Distributions are based on amounts calculated in accordance with applicable federal income tax regulations, which may differ from GAAP. These differences are due primarily to differing treatments of income and gain on various investment securities held by each Fund, timing differences and differing characterizations of distributions made by each Fund.
Federal Taxes – Each Fund intends to continue to qualify each year as a regulated investment company under Subchapter M of Chapter 1, Subtitle A, of the Internal Revenue Code of 1986, as amended (“Code”), and to distribute all of its taxable income to shareholders. In addition, by distributing in each calendar year substantially all of its net investment income and capital gains, if any, the Funds will not be subject to a federal excise tax. Therefore, no federal income or excise tax provision is required. Each Fund files a U.S. federal income and excise tax return as required. Each Fund’s federal income tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed. As of December 31, 2019, there are no uncertain tax positions that would require financial statement recognition, de-recognition or disclosure.
Income and Expense Allocation – The Trust accounts separately for the assets, liabilities and operations of each of its investment portfolios. Expenses that are directly attributable to more than one investment portfolio are allocated among the respective investment portfolios in an equitable manner.
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Redemption Fees – A shareholder who redeems or exchanges shares within 60 days of purchase will incur a redemption fee of 1.00% of the current NAV of shares redeemed or exchanged, subject to certain limitations. The fee is charged for the benefit of the remaining shareholders and will be paid to each Fund to help offset transaction costs. The fee is accounted for as an addition to paid-in capital. Each Fund reserves the right to modify the terms of or terminate the fee at any time. There are limited exceptions to the imposition of the redemption fee. Redemption fees incurred for the Funds, if any, are reflected on the Statements of Changes in Net Assets.
Commitments and Contingencies – In the normal course of business, each Fund enters into contracts that provide general indemnifications by each Fund to the counterparty to the contract. Each Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against each Fund and, therefore, cannot be estimated; however, based on experience, the risk of loss from such claims is considered remote. Each Fund has determined that none of these arrangements requires disclosure on each Fund’s balance sheet.
Note 3. Fees and Expenses
Investment Adviser – Acuitas Investments, LLC (the “Adviser”) is the investment adviser to the Funds. Pursuant to an investment advisory agreement, the Adviser receives an advisory fee, payable monthly, at an annual rate of 1.20% and 1.40% of the average daily net assets of Acuitas International Small Cap Fund and Acuitas US Microcap Fund, respectively.
Each sub-advisory fee, calculated as a percentage of each Fund’s average daily net assets managed by each subadviser, is paid by the Adviser.
Distribution – Foreside Fund Services, LLC serves as each Fund’s distributor (the “Distributor”). The Funds have adopted a Distribution Plan (the “Plan”) for Investor Shares in accordance with Rule 12b-1 of the Act. Under the Plan, the Funds pay the Distributor and/or any other entity as authorized by the Board a fee of up to 0.25% of the average daily net assets of Investor Shares. The Distributor is not affiliated with the Adviser or Atlantic Fund Administration, LLC, a wholly owned subsidiary of Apex US Holdings, LLC (d/b/a Apex Fund Services) (“Apex”) or their affiliates. Currently, Investor Shares are not offered for sale, therefore the Funds are not currently paying 12b-1 fees.
Other Service Providers – Apex provides fund accounting, fund administration, compliance and transfer agency services to each Fund. The fees related to these services are included in Fund services fees within the Statements of Operations. Apex also provides certain shareholder report production and EDGAR conversion and filing services. Pursuant to an Apex services agreement, each Fund pays Apex customary fees for its services. Apex provides a Principal Executive Officer, a Principal Financial Officer, a Chief Compliance Officer and an Anti-Money Laundering Officer to each Fund, as well as certain additional compliance support functions.
Trustees and Officers – The Trust pays each Independent Trustee an annual fee of $16,000 ($21,000 for the Chairman) for service to the Trust. The Independent Trustees and Chairman may receive additional fees for special Board meetings. The Independent Trustees are also reimbursed for all reasonable out-of-pocket expenses incurred in connection with their duties as Trustees, including travel and related expenses incurred in attending Board meetings. The amount of Independent Trustees’ fees attributable to each Fund is disclosed in the Statements of Operations. Certain officers of the Trust are also officers or employees of the above named service providers, and during their terms of office received no compensation from each Fund.
Note 4. Expense Reimbursement and Fees Waived
The Adviser has contractually agreed to waive its fee and/or reimburse expenses to limit total annual fund operating expenses (excluding all taxes, interest, portfolio transaction expenses, acquired fund fees and expenses, proxy expenses and extraordinary expenses) of Institutional Shares to 1.50% and Investor Shares to 1.75% through November 1, 2020, for the Acuitas International Small Cap Fund. The Adviser has also contractually agreed to waive its fees and/or reimburse expenses to limit total annual operating expenses (excluding all taxes, interest, portfolio transaction expenses, acquired fund fees and expenses, proxy expenses and extraordinary expenses) of Institutional Shares to 1.70% and Investor Shares to 1.95% through November 1, 2020, for the Acuitas US Microcap Fund. Other fund service providers have voluntarily agreed to waive a portion of their fees. Voluntary fee waivers may be reduced or eliminated at any time. For the period ended December 31, 2019, the fees waived and/or reimbursed expenses were as follows:
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Investment Adviser Fees Waived | Investment Adviser Expenses Reimbursed | Other Waivers | Total Fees Waived and Expenses Reimbursed | |||||||||||||
Acuitas International Small Cap Fund | $ | 6,437 | $ | 82,524 | $ | 22,171 | $ | 111,132 | ||||||||
Acuitas US Microcap Fund | 87,105 | – | 10,733 | 97,838 |
The Adviser may be reimbursed by each Fund for fees waived and expenses reimbursed by the Adviser pursuant to the Expense Cap if such payment is approved by the Board, made within three years of the fee waiver or expense reimbursement, and does not cause the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to exceed the lesser of (i) the then-current expense cap and (ii) the expense cap in place at the time the fees/expenses were waived/reimbursed. As of December 31, 2019, $556,758 and $306,072 are subject to recapture by the Adviser for the Acuitas International Small Cap Fund and the Acuitas US Microcap Fund, respectively. Other waivers are not eligible for recoupment.
Note 5. Security Transactions
The cost of purchases and proceeds from sales of investment securities (including maturities), other than short-term investments during the period ended December 31, 2019, were as follows:
Purchases | Sales | |||||||
Acuitas International Small Cap Fund | $ | 202,188 | $ | 329,268 | ||||
Acuitas US Microcap Fund | 20,332,522 | 25,799,450 |
Note 6. Federal Income Tax
As of December 31, 2019, the cost for federal income tax purposes is substantially the same as for financial statement purposes and net unrealized appreciation consists of:
Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | ||||||||||
Acuitas International Small Cap Fund | $ | 132,921 | $ | (58,029 | ) | $ | 74,892 | |||||
Acuitas US Microcap Fund | 15,396,360 | (5,578,809 | ) | 9,817,551 |
As of June 30, 2019, distributable earnings on a tax basis were as follows:
Undistributed Long-Term Gain | Capital and Other Losses | Unrealized Appreciation (Depreciation) | Total | |||||||||||||
Acuitas International Small Cap Fund | $ | – | $ | (4,685,120 | ) | $ | (63,898 | ) | $ | (4,749,018 | ) | |||||
Acuitas US Microcap Fund | 43,104 | (2,335,749 | ) | 2,245,099 | (47,546 | ) |
The difference between components of distributable earnings on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to post-October losses, capital loss carryover, investments in passive foreign investment companies (“PFIC”) and wash sales in the Acuitas International Small Cap Fund and investments in PFICs, equity return of capital, partnerships, real estate investment trusts, post-October losses and late year ordinary losses and wash sales in the Acuitas US Microcap Fund.
As of June 30, 2019, the Acuitas International Small Cap Fund had $1,267,202 of available short-term capital loss carryforwards and $219,848 of available long-term capital loss carryforwards that have no expiration date.
For tax purposes, the prior year post-October loss was $3,198,070 and $2,013,313 for Acuitas International Small Cap Fund and Acuitas US Microcap Fund, respectively, (realized during the period November 1, 2018 through June 30, 2019), and the prior deferred late year ordinary loss was $322,436 for Acuitas US Microcap Fund (realized during the period January 1, 2019 through June 30, 2019). These losses were recognized for tax purposes on the first business day of the Funds’ current fiscal year, July 1, 2019.
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Note 7. Subsequent Events
Subsequent events occurring after the date of this report through the date these financial statements were issued have been evaluated for potential impact, and each Fund has had no such events.
ACUITAS FUNDS
ADDITIONAL INFORMATION
DECEMBER 31, 2019
Proxy Voting Information
A description of the policies and procedures that each Fund uses to determine how to vote proxies relating to securities held in each Fund’s portfolio is available, without charge and upon request, by calling (844) 805-5628 and on the U.S. Securities and Exchange Commission's (the "SEC") website at www.sec.gov. Each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is available, without charge and upon request, by calling (844) 805-5628 and on the SEC’s website at www.sec.gov.
Availability of Quarterly Portfolio Schedules
Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. These filings are available, without charge and upon request on the SEC’s website at www.sec.gov or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
Shareholder Expense Example
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees (for Investor Shares only) and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds, and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.
Actual Expenses – The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes – The second line of the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
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. 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.
Beginning | Ending | Expenses | Annualized | |||||||||||||
Acuitas International Small Cap Fund | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,092.67 | $ | 7.89 | 1.50 | % | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.60 | $ | 7.61 | 1.50 | % | ||||||||
Acuitas US Microcap Fund | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,097.57 | $ | 8.96 | 1.70 | % | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,016.59 | $ | 8.62 | 1.70 | % |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184) divided by 366 to reflect the half-year period. |
FOR MORE INFORMATION
Investment Adviser
Acuitas Investments, LLC
520 Pike Street, Suite 1221
Seattle, WA 98101
www.acuitasinvestments.com
Transfer Agent
Apex Fund Services
P.O. Box 588
Portland, ME 04112
www.theapexgroup.com
Distributor
Foreside Fund Services, LLC
Three Canal Plaza, Suite 100
Portland, ME 04101
www.foreside.com
Acuitas International Small Cap Fund
Acuitas US Microcap Fund
P.O. Box 588
Portland, ME 04112
(844) 805-5628
This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus, which includes information regarding the Funds’ risks, objectives, fees and expenses, experience of its management, and other information.
220-SAR-1219
(a) | Included as part of report to shareholders under Item 1. |
(b) | Not applicable. |
By | /s/ Jessica Chase | |
Jessica Chase, Principal Executive Officer | ||
Date | February 25, 2020 |
By | /s/ Jessica Chase | |
Jessica Chase, Principal Executive Officer | ||
Date | February 25, 2020 |
By | /s/ Karen Shaw | |
Karen Shaw, Principal Financial Officer | ||
Date | February 25, 2020 |