VCTL Rainmaker Systems Inc (CE)

As filed with the Securities and Exchange Commission on November 12, 2013
1933 Act File No.                  

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

FORM N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.  o                         Post-Effective Amendment No.  o

FUNDVANTAGE TRUST
(Exact Name Of Registrant As Specified In Charter)

(302) 791-1851

(Area Code and Telephone Number)

301 Bellevue Parkway, Wilmington, DE 19809

(Address of Principal Executive Offices)

Joel L. Weiss

BNY Mellon Investment Servicing (US) Inc.

103 Bellevue Parkway

Wilmington, DE  19809

(Name and Address of Agent for Service)

Copy to:

Joseph V. Del Raso, Esq.
Pepper Hamilton, LLP
3000 Two Logan Square
Philadelphia, PA 19103

Approximate Date of Proposed Public Offering:  As soon as practicable after this Registration Statement becomes effective under the Securities Act of 1933, as amended.

Title of Securities Being Registered: Institutional Class Shares of beneficial interest, no par value, of the Gotham Enhanced Return Fund, a series of the Registrant.  No filing fee is due because Registrant is relying on Section 24(f) of the Investment Company Act of 1940, as amended.

Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), shall determine.

FundVantage Trust

Formula Investing U.S. Value 1000 Fund

Formula Investing U.S. Value Select Fund

301 Bellevue Parkway

Wilmington, DE 19809

(877) 974-6852

[DATE], 2013

Dear Shareholder:

The Prospectus/Proxy Statement that accompanies this letter describes a proposed reorganization of each of the Formula Investing U.S. Value 1000 Fund (the “Value 1000 Fund”) and the Formula Investing U.S. Value Select Fund (the “Value Select Fund”) (each, an “Acquired Fund” or “Formula Fund” and together, the “Acquired Funds” or “Formula Funds”) into the Gotham Enhanced Return Fund (the “Gotham Fund” or the “Acquiring Fund”), each a series of FundVantage Trust (the “Trust”) (the “Reorganizations”). The Acquired Funds and the Acquiring Fund are listed in the table below:

You are being asked to vote on this proposal. The Board of Trustees (the “Board”) of the Trust has unanimously approved the proposal and recommends that you vote FOR the proposal.

The Prospectus/Proxy Statement contains important details about the Acquiring Fund’s investment objective, policies, management, and costs. I urge you to take the time to review it carefully. The Acquiring Fund’s investment objective is identical to that of each of the Acquired Funds. Your vote is important no matter how many shares you own. I would like to answer some initial basic questions about the proposed Reorganizations.

Why are you seeking to merge the Formula Funds into the Gotham Enhanced Return Fund?

In connection with a reorganization of Gotham Asset Management, LLC (the “Adviser”), the Adviser is seeking to merge the Formula Funds, which are U.S. long-only equity funds, into the Gotham Fund, which is a U.S. long/short equity fund.  While the Adviser has been pleased with the performance of the Formula Funds it believes that utilizing its valuation methods to invest on both the long and short side will provide additional benefits over long-only investing.  Specifically, the Gotham Fund buys securities it believes to be the most undervalued and sells (shorts) the securities that it deems to be the most overvalued, which will provide the Gotham Fund with the opportunity to profit from both overvalued and undervalued securities.   While the Gotham Fund is long certain securities and short others, its net exposure to the stock market is targeted at 100% (e.g., it may be 170% long and 70% short), which is the same net exposure as the Formula Funds (e.g., 100% long, 0% short).  The Adviser believes the combined long-short equity strategy will produce better investment results than the long-only strategy over the long-term, including the ability to better preserve capital in down markets.

What will happen to my existing shares?

If shareholders of each Acquired Fund approve the Reorganizations, your shares of that Acquired Fund will be exchanged for shares of the Acquiring Fund. In exchange for Class A shares and Class I shares of each Acquired Fund that you own at the time of the Reorganizations, you will receive Institutional Class shares of the Acquiring Fund. The shares of the Acquiring Fund that you receive following each Reorganization will have an aggregate net asset value equal to the aggregate net asset value of your shares of your Acquired Fund immediately prior to the Reorganization so that there will be no change in the value of your investment as a result of the Reorganization.

How will the fees compare?

The Management Fee of the Acquiring Fund is higher than the Management Fees of the Acquired Funds. The use of the short position strategy by the Acquiring Fund is more expensive for the Adviser to implement because it involves the management of leverage, which is not part of the long-only strategy implemented by the Acquired Funds. In addition, the higher Total Annual Fund Operating Expenses of the Acquiring Fund are also associated with the Acquiring Fund’s strategy of investing in short positions, and the higher expenses are primarily attributable to dividend and interest expenses on securities that are sold short by the Adviser pursuant to the Acquiring Fund’s principal investment strategy. Fund operating expenses are discussed in more detail in the Prospectus/Proxy Statement.

Will I have to pay federal income taxes as a result of each Reorganization?

Shareholders are not expected to recognize gain or loss for federal income tax purposes on the exchange of their shares for shares of the Gotham Fund. Each Reorganization is intended to qualify for federal income tax purposes as a tax-free reorganization.

What are my choices?

On the enclosed proxy card you have three options. You may vote YES, as the Board and management of the Trust recommends. You may vote NO. Or you may ABSTAIN. An abstention vote is not a neutral response; it is the equivalent of a “No” vote. Approval of each Reorganization requires the affirmative vote of the holders of a “majority of the outstanding voting securities” of each Acquired Fund. The term “majority of the outstanding voting securities,” as defined in the Investment Company Act of 1940 and as used in this Prospectus/Proxy Statement, means: the affirmative vote of the lesser of (i) 67% of the voting securities of each Acquired Fund present at a meeting if more than 50% of the outstanding voting securities of an Acquired Fund are present in person or by proxy or (ii) more than 50% of the outstanding voting securities of each Acquired Fund. If the shareholders of an Acquired Fund do not approve the Plan, the Board may consider other possible courses of action in the best interest of shareholders.

Shares will be voted at a Special Meeting of Shareholders to be held at [10:00 a.m.] Eastern Time, on [February 1, 2014], at the offices of the Trust, 301 Bellevue Parkway, Wilmington, Delaware 19809. If you attend the meeting, you may vote your shares in person. If you do not expect to attend the meeting, please complete, date, sign, and return the enclosed proxy card in the enclosed postage paid envelope. Or you may follow the instructions on your proxy card to call in your vote or vote through the Internet.

If you have any questions about the proxy card, please call the Trust at (877) 974-6852. If we do not receive your vote within a few days, you may be contacted by [proxy solicitor], our proxy solicitor, who will remind you to vote.

Thank you for considering the proposal carefully.

FundVantage Trust

301 Bellevue Parkway

Wilmington, DE 19809

(877) 974-6852

Formula Investing U.S. Value 1000 Fund

Formula Investing U.S. Value Select Fund

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To Be Held on [February 1, 2014]

NOTICE IS HEREBY GIVEN that a Special Meeting of the Shareholders of each of the Formula Investing U.S. Value 1000 Fund and Formula Investing U.S. Value Select Fund, each a series of FundVantage Trust (each, an “Acquired Fund” and collectively, the “Acquired Funds”) will be held at the offices of FundVantage Trust, 301 Bellevue Parkway, Wilmington, DE  19809, on [February 1, 2014], at [10:00 a.m.], Eastern time, and any adjournment or postponement thereof (the “Special Meeting”) for the following purpose:

To consider and act upon an Agreement and Plan of Reorganization (the “Plan”) between each Acquired Fund identified below and the corresponding Acquiring Fund identified below (the “Acquiring Fund”) providing for:  (i) the transfer of all of the assets of the Acquired Fund in exchange solely for class shares of the Acquiring Fund as set forth in the table below and the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund; (ii) the distribution of shares of the Acquiring Fund to shareholders of the corresponding Acquired Fund as set forth in the table below; and (iii) the liquidation and dissolution of each Acquired Fund (each, a “Reorganization” and collectively, the “Reorganizations”).

The Board of Trustees of FundVantage Trust has fixed the close of business on [RECORD DATE] as the record date for determination of shareholders entitled to notice of and to vote at the Special Meeting.

Some shareholders hold shares in both Acquired Funds and may receive proxy cards or proxy materials for each Acquired Fund owned.  Please sign and promptly return each proxy card in the postage paid return envelope regardless of the number of shares owned.  Shareholders of each Acquired Fund will vote separately on each Reorganization, and the Reorganization will be effected as to a particular Acquired Fund only if that Acquired Fund’s shareholders approve the Reorganization.

SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.   SHAREHOLDERS MAY ALSO VOTE BY TELEPHONE OR VOTE THROUGH THE INTERNET.  INSTRUCTIONS FOR THE PROPER EXECUTION OF THE PROXY ARE SET FORTH IMMEDIATELY FOLLOWING THIS NOTICE OR, WITH RESPECT TO TELEPHONE OR INTERNET VOTING, ON THE PROXY CARD.  IT IS IMPORTANT THAT YOU VOTE PROMPTLY.

[DATE]

INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general rules for signing proxy cards may be of assistance to you and avoid the time and expense in validating your vote if you fail to sign your proxy card properly.

1.                                       Individual Accounts:   Sign your name exactly as it appears in the registration on the proxy card.

2.                                       Joint Accounts:  Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the proxy card.

3.                                       All Other Accounts:  The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration.  For example:

PROSPECTUS/PROXY STATEMENT

Acquisition of Assets and Liabilities of

FORMULA INVESTING U.S. VALUE 1000 FUND

and

FORMULA INVESTING U.S. VALUE SELECT FUND

By And In Exchange For Shares of

GOTHAM ENHANCED RETURN FUND

each, a series of

FundVantage Trust

301 Bellevue Parkway
Wilmington, DE  19809
(877) 974-6852

[DATE], 2013

This Prospectus/Proxy Statement is being furnished in connection with the proposed Agreement and Plan of Reorganization (the “Plan”) which will be submitted to shareholders of each of the Formula Investing U.S. Value 1000 Fund (the “Value 1000 Fund”) and the Formula Investing U.S. Value Select Fund (the “Value Select Fund”) (each, an “Acquired Fund” or “Formula Fund” and together, the “Acquired Funds” or “Formula Funds”) for consideration at a Special Meeting of Shareholders of FundVantage Trust (the “Trust”) to be held on [February 1, 2014] at [10:00 a.m.] Eastern Time at the offices of the Trust, 301 Bellevue Parkway, Wilmington, Delaware, 19809, and any adjournments (the “Meeting”). The statement of additional information, dated [DATE], which relates to this Prospectus/Proxy Statement and the Reorganization (defined below), is available upon request and without charge by calling the Trust at (877) 974-6852, by writing to the Trust at P.O. Box 9829, Providence, RI 02940, or by downloading a copy from visiting www.formulainvestingfunds.com and www.gothamfunds.com.

GENERAL

The Board of Trustees (the “Board”) of the Trust has unanimously approved the proposed reorganization of each of the Value 1000 Fund and Value Select Fund into the Gotham Enhanced Return Fund (the “Acquiring Fund” or the “Gotham Fund”), a separate series of the Trust. Each Fund is an open-end management investment company. The Value 1000 Fund, the Value Select Fund and the Gotham Fund are sometimes referred to in this Prospectus/Proxy Statement individually as a “Fund” and collectively as the “Funds.”

In each reorganization, all of the assets of each of the Value 1000 Fund and Value Select Fund will be transferred to the Gotham Fund in exchange for Institutional Class shares of the Gotham Fund and the assumption by the Gotham Fund of all the liabilities of each of the Value 1000 Fund and Value Select Fund (each, a “Reorganization” and together, the “Reorganizations”). If each Reorganization is approved by shareholders of each Acquired Fund, shares of the Gotham Fund will be distributed to shareholders of each of the Value 1000 Fund and Value Select Fund in liquidation of each Fund, and each of the Value 1000 Fund and Value Select Fund will be terminated as a series of the Trust. Whether you own Class A shares or Class I shares of the Value 1000 Fund or the Value Select Fund you will receive Institutional Class shares of the Gotham Fund. The total value of your investment will not change as a result of the Reorganizations. You will not incur any sales loads or similar transaction charges as a result of the Reorganizations. Each Reorganization is intended to qualify for federal income tax purposes as a tax-free reorganization.

Because you, as a shareholder of an Acquired Fund, are being asked to approve transactions that will result in you holding shares of the Gotham Fund, this Proxy Statement also serves as a Prospectus for the Gotham Fund. This Prospectus/Proxy Statement, which you should retain for future reference, contains important information about the Gotham Fund that you should know before voting or investing. Please read it carefully. Additional information concerning each of the Acquired Funds and the Gotham Fund is contained in the documents described below, all of which have been filed with the Securities and Exchange Commission (the “SEC”) and all of the documents described below are incorporated herein by reference (legally considered to be part of this Prospectus/Proxy Statement):

You can also obtain copies of any of these documents without charge on the EDGAR database on the SEC’s Internet site at http://www.sec.gov. Copies are available for a fee by electronic request at the following e-mail address: publicinfo@sec.gov, or from the Public Reference Section, Securities and Exchange Commission, Washington, D.C. 20549-1520.

SUMMARY

This section summarizes the primary features and consequences of each Reorganization.  It may not contain all of the information that is important to you.  To understand each Reorganization, you should read this entire Prospectus/Proxy Statement and the exhibits.

This summary is qualified in its entirety by reference to the additional information contained elsewhere in this Prospectus/Proxy Statement, the Gotham Fund Prospectus, the Gotham Fund SAI, and a form of the Agreement and Plan of Reorganization (the “Plan”), which is attached to this Prospectus/Proxy Statement as Exhibit A.

Why are the Reorganizations being proposed?

In connection with a reorganization of Gotham Asset Management, LLC (the “Adviser”), the Adviser is seeking to merge the Formula Funds, which are U.S. long-only equity funds, into the Gotham Fund, which is a U.S. long/short equity fund.  While the Adviser has been pleased with the performance of the Formula Funds it believes that utilizing its valuation methods to invest on both the long and short side will provide additional benefits over long-only investing.  Specifically, the Gotham Fund buys securities it believes to be the most undervalued and sells (shorts) the securities that it deems to be the most overvalued, which will provide the Gotham Fund with the opportunity to profit from both overvalued and undervalued securities.  While the Gotham Fund is long certain securities and short others, its net exposure to the stock market is targeted at 100% (e.g., it may be 170% long and 70% short), which is the same net exposure as the Formula Funds (e.g., 100% long, 0% short).  The Adviser believes the combined long-short equity strategy will produce better investment results than the long-only strategy over the long-term, including the ability to better preserve capital in down markets.

What are the key features of the Reorganizations?

The Plan sets forth the key features of the Reorganizations.  A description of the Reorganizations is set out in the Plan, a form of which is attached as Exhibit A.  The Plan generally provides for the following:

·                                           the transfer of all of the assets of an Acquired Fund to a corresponding Acquiring Fund in exchange for shares of the Acquiring Fund;

·                                           the assumption by the Acquiring Fund of all of the liabilities of the corresponding Acquired Fund;

·                                           the termination of each Acquired Fund subsequent to the distribution of shares of the corresponding Acquiring Fund to the Acquired Fund’s shareholders in complete liquidation of the Acquired Fund; and

·                                           the structuring of each Reorganization as a tax-free reorganization for federal income tax purposes.

The Reorganizations are expected to be completed on or about [February     , 2014].

After the Reorganizations, what shares of the Acquiring Fund will I own?

Following each Reorganization, shareholders of Class A shares and Class I shares of each Acquired Fund will receive Institutional Class shares of the Acquiring Fund.

The new Acquiring Fund shares you receive will have the same total value as your shares of the corresponding Acquired Fund as of the close of business on the day immediately prior to the Reorganizations.

How will the Reorganizations affect me?

After the Reorganizations, operating efficiencies may be achieved by the Acquiring Fund because it will have a greater level of combined assets than each of the Acquired Funds. As of [DATE], the Value 1000 Fund, the Value Select Fund, and the Gotham Fund’s total net assets were approximately [$          ], [$            ] and [$          ],

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respectively. The Management Fee and the Total Annual Fund Operating Expenses for the Acquiring Fund will be higher than those of the Acquired Funds due to the higher costs associated with the Acquiring Fund’s short portfolio.

Following the Reorganizations, each Acquired Fund will cease to exist and the value of your shares will depend on the performance of the Acquiring Fund.  Neither the Funds nor the shareholders will bear any costs of the Meeting, this proxy solicitation, or any adjourned session. All of the costs of the Reorganizations will be paid by the Adviser.

Like each of the Acquired Funds, the Acquiring Fund will declare investment income, if any, annually and distribute it to its shareholders. The Acquiring Fund will distribute net realized capital gains, if any, annually. These dividends and distributions will continue to be reinvested in shares of the Acquiring Fund you receive in the Reorganization or, if you have so elected, distributed in cash or invested in other funds of the Adviser.  Gotham will continue to advise the Acquiring Fund after the Reorganizations.

THE BOARD RECOMMENDS THAT YOU VOTE FOR THE PROPOSED REORGANIZATIONS.

How does the Board recommend that I vote?

The Board of the Trust, including the Trustees who are not “interested persons” (the “Disinterested Trustees”), as such term is defined in the 1940 Act, have concluded that the Reorganizations would be in the best interest of the shareholders of each Acquired Fund and that their interests will not be diluted in value as a result of the Reorganizations. Accordingly, the Board has approved the Plan on behalf of each Acquiring Fund, authorized the Special Meeting of Shareholders for the consideration of the Plan by shareholders of each Acquired Fund and recommends Shareholders vote “for” each Reorganization.

How do the Funds’ investment goals and principal investment strategies compare?

The investment objective of each Fund is identical. Both Acquired Funds and the Acquiring Fund seek to achieve long-term capital appreciation. The investment objective of each Fund is non-fundamental, which means that it may be changed by vote of the Board without shareholder approval.

In addition, the principal investment strategies of the Funds are similar.  Each Fund invests primarily in securities of U.S. issuers.  Each Fund targets 100% net exposure of its assets to the stock market.  Each Fund relies on the Adviser’s proprietary strategy to construct a portfolio of common stocks that is weighted based on the Adviser’s assessment of a security’s fundamental value. In addition, each Fund may experience a high portfolio turnover rate.  Although not a principal investment strategy, each Fund, may also enter into temporary defensive positions.

There are, however, differences that you should consider.  All Funds invest in common stocks; however, the Acquiring Fund also invests in short positions of equity and equity-related securities and seeks a total return greater than that of the S&P 500® Index over a full market cycle, which is a period that includes both a bull (rising) and a bear (falling) market cycle. By taking long and short positions in different securities, the Acquiring Fund attempts to limit the effect of market movements on portfolio performance.  Although the Gotham Fund’s net exposure to the stock market is targeted at 100%, which is the same net exposure as each Acquired Fund, unlike the Acquired Funds, the Gotham Fund achieves that exposure by combining long investments in the highest ranked common stocks with short exposure to the lowest ranked common stocks based on the Adviser’s proprietary strategy.  While each Acquired Fund will typically be 100% long with no short exposure, the Gotham Fund may be 170% long and 70% short.  In addition to investing in equity securities, the Acquiring Fund may also invest in equity-related securities that include convertible bonds, convertible preferred stock, warrants and rights.

Each Acquired Fund has adopted a formal policy to invest at least 80% of each Fund’s net assets in securities of U.S. issuers, as required by applicable regulations that govern the use of the term “U.S.” in the name of each Acquired Fund.  The Gotham Fund is not required by regulation to maintain such an “80% policy” and therefore has not adopted one.  However, all Funds invest primarily in U.S. companies and maintain similar limited exposure to non-U.S. issuers.

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The following table describes the investment objectives and principal investment strategies of each of the Funds.

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How do the Funds’ investment limitations compare?

The investment limitations of the Acquired Funds are identical, and are substantially similar to the Acquiring Fund. The Funds’ non-fundamental investment limitations may be changed by the Board of Trustees without shareholder approval unless shareholder approval is required by the 1940 Act or the rules and regulations thereunder.  The following table compares the investment limitations of the Acquired Funds and the Acquiring Fund.

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How do the Funds’ fees and expenses compare?

Comparative Fee Tables

Each Acquired Fund currently offers two classes of shares: Class A and Class I. The Acquiring Fund currently offers one class of shares: Institutional Class. Acquired Fund shareholders of either Class A or Class I shares will receive Institutional Class shares of the Acquiring Fund.

The following tables allow you to compare the various fees and expenses that you may pay for buying and holding shares of each of the Funds. The tables also show the various costs and expenses that investors in an Acquired Fund will bear as shareholders of the Acquiring Fund. Pro forma expense levels shown should not be considered an actual representation of future expenses or performance. Such pro forma expense levels project anticipated levels but actual expenses may be greater or less than those shown.

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(1)                                  Gotham and the Trust have entered into an expense limitation agreement whereby Gotham has contractually agreed to reduce its investment advisory fee and/or reimburse certain Fund expenses to the extent necessary to ensure that total operating expenses (excluding any class-specific  fees and expenses, short sale dividend expenses (with respect to the Gotham Fund), interest, extraordinary items, “Acquired  Fund fees and expenses” and brokerage commissions) do not exceed 1.00% (on an annual basis) of average daily net assets of the Value 1000 Fund and 2.25% (on an annual basis) of average daily net assets of the Gotham Fund (each, an “Expense Limitation”). The Expense Limitations will remain in place until August 31, 2014 for the Value 1000 Fund and August 31, 2015 for the Gotham Fund, unless the Board of Trustees of the Trust approves its earlier termination. The Adviser is entitled to recover, subject to approval by the Board of Trustees, such amounts reduced or reimbursed for a period of up to three (3) years from the year in which the Adviser reduced its compensation and/or assumed expenses for the Fund. No recoupment will occur unless the Fund’s expenses are below the Expense Limitation.  Upon completion of the Reorganization, any amounts of reduced compensation and/or assumed expenses for periods prior to the date of the Reorganization will cease to be eligible for recovery.

*                                          The Board has temporarily rescinded the Redemption Fee for the Value 1000 Fund effective as of October 30, 2013 in advance of the proposed Reorganization.

**                                   Does not include Dividend and Interest expense of 1.22%.

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(1)                                  Gotham and the Trust have entered into an expense limitation agreement whereby Gotham has contractually agreed to reduce its investment advisory fee and/or reimburse certain Fund expenses to the extent necessary to ensure that total operating expenses (excluding any class-specific  fees and expenses, short sale dividend expenses (with respect to the Gotham Fund), interest, extraordinary items, “Acquired  Fund fees and expenses” and brokerage commissions) do not exceed 1.10% (on an annual basis) of average daily net assets of the Value Select Fund and 2.25% (on an annual basis) of average daily net assets of the Gotham Fund (each, an “Expense Limitation”). The Expense Limitations will remain in place until August 31, 2014 for the Value Select Fund and August 31, 2015 for the Gotham Fund, unless the Board of Trustees of the Trust approves its earlier termination. The Adviser is entitled to recover, subject to approval by the Board of Trustees, such amounts reduced or reimbursed for a period of up to three (3) years from the year in which the Adviser reduced its compensation and/or assumed expenses for the Fund. No recoupment will occur unless the Fund’s expenses are below the Expense Limitation.  Upon completion of the Reorganization, any amounts of reduced compensation and/or assumed expenses for periods prior to the date of the Reorganization will cease to be eligible for recovery.

*                                          The Board has temporarily rescinded the Redemption Fee for the Value Select Fund effective as of October 30, 2013 in advance of the proposed Reorganization.

**                                   Does not include Dividend and Interest expense of 1.22%.

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Formula Investing U.S. Value 1000 Fund (Acquired Fund) and Formula Investing U.S. Value Select Fund (Acquired Fund) into Gotham Enhanced Return Fund (Acquiring Fund)

The fees and expenses for the shares of the Value 1000 Fund, the Value Select Fund, and the Gotham Fund set forth in the following tables and in the examples are based on the expenses for the Value 1000 Fund, Value Select Fund, and the Gotham Fund as of October 31, 2013.

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Expense Examples

The examples are intended to help you compare the cost of investing in each Acquired Fund versus the Acquiring Fund and the Acquiring Fund (Pro Forma ), assuming each Reorganization takes place.  The examples assume that you invest $10,000 for the time periods indicated and then, except as indicated, redeem all of your shares at the end of those periods. The examples also assume that your investment has a 5% return each year and that the operating expenses remain the same.  The examples also assume that the expense limitations for the Acquired Funds, Acquiring Fund and Acquiring Fund ( Pro Forma ) remain in effect for a period of one year.  Although your actual costs may be higher or lower, based on these assumptions your costs would be:

The projected post-Reorganization pro forma combined Annual Fund Operating Expenses and Expense Examples presented above are based on numerous material assumptions, including that the expense limitations for the Acquired Funds, Acquiring Fund and Acquiring Fund (Pro Forma) remain in effect for a period of one year..

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Although these projections represent good faith estimates, there can be no assurance that any particular level of expenses or expense savings will be achieved because expenses depend on a variety of factors, such as the future level of Acquiring Fund’s assets. Those factors are beyond the control of Acquiring Fund and Adviser.

If a Reorganization is approved, the resulting combined Fund will retain Acquiring Fund’s expense structure.

Portfolio Turnover

Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio).  A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account.  These costs, which are not reflected in Total Annual Fund Operating Expenses or in the Example, affect the Funds’ performance.  For the fiscal year ended April 30, 2013, the Value 1000 Fund’s and the Value Select Fund’s portfolio turnover rates were 111% and 101%, respectively, of the average value of their portfolios.  The portfolio turnover rate of the Acquiring Fund is expected to be similarly high given the continuity of portfolio management and the similar investment strategies, and may be higher due to the Acquiring Fund’s short selling strategies.

How do the Funds’ performance records compare?

The bar charts and performance tables below illustrate some of the risks of investing in the Funds by showing changes in the Funds’ performance from year to year (before taxes) and by showing how each Fund’s average annual total returns for 1 year and since inception compare with a broad measure of market performance (the Russell 1000 ®  Index for the Acquired Funds). The bar charts do not reflect any sales charges, which would reduce your return. The Funds’ past performance (before and after taxes) does not necessarily indicate how each Fund will perform in the future. Updated performance for the Acquired Funds and the Acquiring Fund is available at no cost by visiting www.formulainvestingfunds.com and www.gothamfunds.com , respectively, or by calling (877) 974-6852.

Value 1000 Fund (Acquired Fund) — Class A Total Return as of December 31, 2012

Calendar Year-to-Date Total Return as of September 30, 2013:               %

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Value Select Fund (Acquired Fund) — Class A Total Return as of December 31, 2012

Calendar Year-to-Date Total Return as of September 30, 2013:               %

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on your tax situation and may differ from those shown and are not relevant if you hold your shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns shown are for Class A shares only; after-tax returns for Class I shares will vary.

(1) The Russell 1000 ®  Index is an index that measures the performance of approximately 1,000 of the largest U.S. equities, as measured by market capitalization.

Will I be able to purchase, redeem, and exchange shares and receive distributions the same way?

Acquiring Fund shares are sold in a continuous offering and are offered to the public by the Funds’ principal underwriter, Foreside Funds Distributors LLC (“Foreside”), and may be purchased through certain broker-dealers or directly from the Funds’ transfer agent, BNY Mellon Asset Servicing US Inc. (“BNY Mellon”). In the proposed Reorganizations, Acquired Fund shareholders will receive shares of the Acquiring Fund and will be able to purchase, redeem and exchange shares and receive distributions the same way as they currently do with respect to their shares of an Acquired Fund.

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Because the Acquiring Fund is primarily offered to institutional investors, the Fund only offers Institutional Class Shares, which have a higher investment minimum than Class A Shares of the Acquired Funds.  Class A shareholders of the Acquired Funds participating in the Reorganizations will not be subject to such minimum investment levels.  However, minimum levels for subsequent investments in Institutional Class Shares of the Acquiring Fund are higher than those of Class A Shares of the Acquired Funds and subsequent investments will generally be subject to such minimums.  For more details, please see the discussion on page [31] of this Prospectus/Proxy Statement.

Who will be the Adviser and Portfolio Manager of my Fund after the Reorganization? What will the advisory fees be after the Reorganization?

Management of the Funds

The overall management of each Fund is the responsibility of, and is supervised by, the Board of the Trust.

Adviser

Gotham is the investment adviser of the Funds. As of October 31, 2013, the Adviser has assets under management of approximately $3 billion. Joel Greenblatt and Robert Goldstein, the Funds’ portfolio managers, each own more than 25% of Gotham Asset Management Holdings, LP, which owns 100% of the Adviser. Therefore, Messrs. Greenblatt and Goldstein each is presumed to control the Adviser. The address of the Adviser and each of Messrs. Greenblatt and Goldstein is 535 Madison Avenue, New York, NY 10022. The Adviser is also responsible for running all of the operations of the Funds, except those that are subcontracted to the custodian, transfer agent, administrative agent, or other parties.

Portfolio Management of the  Funds

Joel Greenblatt, Co-Chief Investment Officer & Portfolio Manager, serves as Managing Principal and Co-Chief Investment Officer of Gotham, the successor to Gotham Capital, an investment firm he founded in 1985. Since 1996, he has been a professor on the adjunct faculty of Columbia Business School where he teaches “Value and Special Situation Investing.” Mr. Greenblatt serves on the Investment Board for the University of Pennsylvania and is a director of Pzena Investment Management, Inc., a global investment management firm. Mr. Greenblatt is the author of You Can Be A Stock Market Genius (Simon & Schuster, 1997), The Little Book that Beats the Market (Wiley, 2010), and The Big Secret for the Small Investor (Random House, 2011). He was the Chairman of the Board (1994-1995) and a board member (1994-2000) of Alliant Techsystems, a NYSE-listed aerospace and defense contractor. He holds a BS (1979), summa cum laude , and an MBA (1980) from the Wharton School of the University of Pennsylvania.

Robert Goldstein,  Co-Chief Investment Officer & Portfolio Manager, serves as Managing Principal and Co-Chief Investment Officer of Gotham, the successor to Gotham Capital, which he joined in 1989. Mr. Goldstein also founded and served as Managing Partner (1989-1997) of Metropolis Partners, a value and special situation investment partnership managing capital on behalf of institutions and wealthy individuals. Mr. Goldstein briefly served on the Executive Committee of the Board of Directors of Old Guard Group, Inc., a publicly-traded insurance company, prior to its being acquired by the Westfield Companies in 2000. He holds a BA (1988), magna cum laude , from Tufts University.

After the Reorganizations, Messrs. Greenblatt and Goldstein will continue to serve as portfolio managers of the Gotham Fund. The Gotham Fund SAI provides additional information about each portfolio manager’s compensation, other accounts managed, and ownership of securities in his managed Fund.

Advisory Fees

For its management and supervision of the daily business affairs of each of the Acquired Funds, Gotham receives the following management fees: a monthly fee at the annual rate of 0.75% of the Value 1000 Fund’s average daily net assets and a monthly fee at the annual rate of 0.85% of the Value Select Fund’s average daily net assets. The annual fee rate paid to Gotham by the Value 1000 Fund and the Value Select Fund for the fiscal year ended April 30, 2013, net of advisory fees waived by Gotham, if any, was 0.44% and 0.85%, respectively.

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For its management and supervision of the daily business affairs of the Acquiring Fund, Gotham receives a monthly fee at the annual rate of 2.00% of the Acquiring Fund’s average daily net assets. The annual fee rate paid to Gotham by the Fund for the period ended [DATE], net of advisory fees waived by Gotham, if any, was [2.00]%.

The Trust and Gotham have entered into an expense limitation agreement whereby the Value 1000 Fund’s and the Value Select Fund’s total operating expenses (excluding any class-specific fees and expenses, interest, extraordinary items, “Acquired Fund Fees and Expenses,” and brokerage commissions) will be contractually limited until at least August 31, 2014 and will not exceed 1.00% and 1.10% (on an annual basis) of average daily net assets of each Fund, respectively.

The Trust and Gotham have also entered into an expense limitation agreement whereby the Gotham Fund’s total operating expenses (excluding any class-specific fees and expenses, short sale dividend expenses, interest, extraordinary items, “Acquired Fund fees and expenses” and brokerage commissions) will not exceed 2.25% (on an annual basis) of average daily net assets of the Fund and will be contractually limited until at least August 31, 2015.

Advisory Agreement Approval

A discussion of the basis for the Board’s approval of the Acquired Funds’ advisory agreement can be found in the Formula Funds’ October 31, 2012 Semi-Annual Report. A discussion of the basis for the Board’s approval of the Acquiring Fund’s advisory agreement will be available in the Fund’s report to shareholders for the period ended October 31, 2013.

Will the Acquiring Fund have the same service providers as the Acquired Funds?

The Acquired Funds and the Acquiring Fund employ the same service providers.  Upon completion of the Reorganizations, the Acquiring Fund will continue to engage the existing service providers.

For additional information regarding the service providers to the Acquiring Fund and the Acquired Funds, please see the Gotham  SAI and the SAI relating to this Prospectus/Proxy Statement.

What will be the primary federal tax consequences of the Reorganizations?

Prior to or at the completion of the Reorganizations, the Acquiring Fund and the Acquired Funds will have each received an opinion from the law firm of Pepper Hamilton LLP that each Reorganization intends to qualify as a tax-free reorganization within the meaning of section 368(a) of the United States Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, it is believed that no gain or loss generally will be recognized by the Acquired Funds or the Acquiring Fund or their respective shareholders. The amount of each Acquired Fund’s capital loss carryforwards available to offset capital gains of the Acquiring Fund in any given year following the Reorganizations may be substantially limited and the expiration of these carryforwards will be accelerated by one year as a consequence of each Reorganization. See “Information About the Reorganizations-Federal Income Tax Consequences” for more information on the federal tax consequences of each Reorganization.

Will there be any repositioning costs?

Although each Acquired Fund and the Acquiring Fund have identical investment objectives and similar investment strategies, it is expected that a portion of the securities held by the Acquired Funds may be sold

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in order to align the Acquired Funds’ portfolios with the Acquiring Fund’s investment strategy. The estimated transaction costs anticipated to be incurred in connection with the sale of such portfolio securities are $[        ] for the Value 1000 Fund and $[       ] for the Value Select Fund.

COMPARISON OF PRINCIPAL RISKS

Are the risk factors for the Funds similar?

Yes. The risk factors are similar due to the identical investment objectives and comparable investment strategies of the Acquired Funds and the Acquiring Fund. The Acquired Funds have identical principal risks. However, there are some important differences. The Acquired Funds are not subject to Short Sale Risk, while the Acquiring Fund is subject to Short Sale Risk as a principal risk.

What are the primary risks of investing in each Fund?

An investment in each Fund is subject to certain risks. There is no assurance that the investment performance of any Fund will be positive or that the Funds will meet their investment objective. You could lose money on your investment in the Funds and the Funds could also return less than other investments. The following table highlights the principal risks associated with an investment in each of the Funds.

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INFORMATION ABOUT THE REORGANIZATIONS

Reasons for the Reorganizations

At a special meeting held on October 29, 2013, the Board of the Trust, including the Disinterested Trustees, considered and unanimously approved the Reorganizations, determined that each Reorganization was in the best interests of shareholders of each Acquired Fund and the Acquiring Fund, and that the interests of existing shareholders of the Funds will not be diluted in value as a result of the transactions contemplated by the Reorganizations.

In evaluating the Reorganizations, the Board requested and reviewed, with assistance of legal counsel, materials related to the salient features of the reorganization.  These materials included written information regarding the principal terms and conditions of the Reorganizations, including the intention that the Reorganizations be consummated on a tax-free basis for each Acquired Fund and its shareholders, and a preliminary form of this document.   Representatives of the Adviser participated in the special Board meeting and provided a detailed explanation of their rationale for the proposed Reorganization and the anticipated benefits of the Acquired Fund’s investment strategy, and responded to questions by the Board.

In considering the proposal, the Board noted that the Acquiring Fund has an identical investment objective to that of each of the Acquired Funds. The Board considered that the Acquired Funds’ investment strategies are similar to the Acquiring Fund’s investment strategy.  The Board noted that under its investment strategy, however, the Acquiring Fund may utilize long and short positions in equity and equity-related securities, whereas each of the Acquired Funds invests only in long positions in equity securities.  The Board considered the Adviser’s assertions that it believes that being able to take short positions in certain securities allows the Adviser to more fully implement its investment strategy and is a valuable tool in seeking to achieve a Fund’s investment objective. The Adviser believes the shareholders of the Acquired Funds will benefit from the Adviser having a greater range of investment options and not being limited to long-only investment in securities.  The Board further considered the Adviser’s statements that it was in the process of discontinuing the use of the Formula long-only mutual fund investment strategies, including those employed by the Acquired Funds, across the remainder of its investment advisory clients.  The Board noted that at the same special Board meeting the Adviser had proposed and the Board had approved the

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liquidation of two additional series of the Trust advised by the Adviser that utilized the Formula long-only investment strategy for international equity investments.

The Board noted that the Management Fee and the Total Annual Fund Operating Expenses for the Acquiring Fund are higher than those for the Acquired Funds due to the associated costs with the Acquiring Fund’s short portfolio. The use of the short position strategy by the Acquiring Fund is more expensive for the Adviser to implement because it involves the management of leverage, which is not part of the long-only strategy implemented by the Acquired Funds. The higher Total Annual Fund Operating Expenses of the Acquiring Fund are also associated with the Acquiring Fund’s strategy of investing in short positions, and the higher expenses are primarily attributable to dividend and interest expenses on securities that are sold short by the Adviser pursuant to the Acquiring Fund’s principal investment strategy.  The Board concluded that the fees associated with the Acquiring Fund remained appropriate in light of the nature of the Fund’s strategy and the services provided by the Adviser to the Acquiring Fund.

The Board also considered whether Acquiring Fund shareholders would have the opportunity to redeem their shares without penalty in advance of the Reorganization if they did not wish to participate in the reorganization.  The Board considered whether it would be appropriate to rescind the redemption fee applicable to shares of each Acquired Fund in light of the proposed Reorganizations.  Based on information from the Adviser regarding the redemption fee, the anticipated impact of shareholder redemptions on each Acquired Fund, respectively, and the relative low likelihood of market timing activity, the Board concluded that it was appropriate to rescind the redemption fee and that such action was not likely to have a material adverse impact on either Acquired Fund.

In addition, the Board considered, among other things:

·                   the terms and conditions of the Reorganizations as set forth in the Plan, and concluded that the Plan appropriately set forth the respective rights and obligations of the Funds and  provided for a mechanism whereby the interests of existing shareholders of the Funds will not be diluted in value as a result of the transactions contemplated by the Reorganizations;

·                   the investment advisory and other fees paid by the Funds and the expense ratio of the Acquiring Fund as compared with those of the Acquired Funds, and concluded that the expenses associated with the Acquiring Fund were appropriate in light of the nature of the Fund’s strategy and the services provided by the Adviser to the Acquiring Fund;

·                   that the expenses of the Reorganizations would not be borne by the Acquired Funds’ shareholders, and concluded that it was appropriate under the circumstances for the Adviser to bear such expenses;

·                   the fact that the investment personnel of the Acquiring Fund will remain the same as the Acquired Funds;

·                   the investment objectives and similarities and differences between the investment strategies and risks of the Funds, and concluded that the Acquired Fund’s strategy enabled shareholders to maintain the same level of net equity exposure to the stock market;

·                   the fact that the Acquiring Fund will assume all of the liabilities of each Acquired Fund;

·                   the benefits to shareholders, including operating efficiencies, which may be achieved from the Reorganizations;

·                   the ability of Class A shareholders of the Acquiring Funds to invest in the Institutional Shares of the Acquiring Fund as a result of the merger, and concluded that it would be beneficial to such shareholders to get access to an institutional investment product at initial investment amounts below the Acquired Fund’s typical minimum amount;

·                   the anticipated tax-free nature of the Reorganizations for each Acquired Fund and its shareholders; and

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·                   alternatives available to shareholders of each Acquired Fund, including the ability to redeem their shares in advance of the Reorganization, and concluded that, as a result of the rescinding of the redemption fee, such redemption would be without penalty.

After consideration of the factors noted above, together with other factors and information considered to be relevant, and recognizing that there can be no assurance that any benefits will in fact be realized, the Board concluded that the Reorganizations would be in the best interests of each Acquired Fund and its shareholders. Consequently, it unanimously approved the Plan and directed that the Plan be submitted to shareholders of each Acquired Fund for approval.

The Board of the Trust, including the Disinterested Trustees, have also unanimously approved the Plan on behalf of the Acquiring Fund.

Agreement and Plan of Reorganization

The following summary is qualified in its entirety by reference to the Plan (the form of which is attached as Exhibit A to this Prospectus/Proxy Statement).

The Plan provides that all of the assets of each Acquired Fund will be acquired by the Acquiring Fund in exchange for Institutional Class shares of the Acquiring Fund and the assumption by the Acquiring Fund of all of the liabilities of each Acquired Fund immediately prior to the opening of business on [DATE] or such other date as may be agreed upon by the parties (the “Closing Date”). Prior to the Closing Date, each Acquired Fund will endeavor to discharge all of its known liabilities and obligations. Each Acquired Fund will prepare an unaudited statement of its assets and liabilities as of the close of regular trading on the NYSE, typically 4:00 p.m. Eastern Time, on the business day immediately prior to the Closing Date (the “Valuation Date”).

At or prior to the Valuation Date, for tax reasons, each Acquired Fund will declare any dividends or distributions which, together with all previous dividends and distributions, shall have the effect of distributing to each Acquired Fund’s shareholders all of such Acquired Fund’s investment company taxable income for the taxable period ending on the Closing Date (computed without regard to any deduction for dividends paid), all of the Acquired Fund’s net tax exempt income, if any, and all of its net capital gains realized in all taxable periods ending on the Closing Date (after reductions for any capital loss carryforward).

The number of full and fractional Institutional Class shares of the Acquiring Fund to be received by the shareholders of each Acquired Fund will be determined by multiplying the number of outstanding Class A and Class I shares of an Acquired Fund by a ratio which shall be computed by dividing the net asset value per share of the Class A and Class I shares of an Acquired Fund by the net asset value per share of the Institutional Class shares of the Acquiring Fund. These computations will take place as of the Valuation Date.

BNY Mellon Investment Servicing (US) Inc., the accounting agent of the Funds, will compute the value of each Fund’s respective portfolio of securities. The method of valuation employed will be consistent with the procedures set forth in the Declaration of Trust and the Funds’ prospectuses and SAIs.

As soon after the Closing Date as conveniently practicable, each Acquired Fund will liquidate and distribute pro rata to shareholders of record as of the close of business on the Closing Date the full and fractional shares of the Acquiring Fund received by each Acquired Fund. The liquidation and distribution will be accomplished by the establishment of accounts in the names of each Acquired Fund’s shareholders on the Acquiring Fund’s share records of its transfer agent. Each account will represent the respective pro rata number of full and fractional shares of the Acquiring Fund due to each Acquired Fund’s shareholders. All issued and outstanding shares of each Acquired Fund will be canceled. Shares of the Acquiring Fund to be issued will have no preemptive or conversion rights and no share certificates will be issued. After these distributions and the winding up of its affairs, each Acquired Fund will be terminated.

The consummation of each Reorganization is subject to the conditions set forth in the Plan, including approval by each Acquired Fund’s shareholders, accuracy of various representations and warranties and receipt of opinions of counsel. Notwithstanding approval by each Acquired Fund’s shareholders, the Plan may be terminated (a) by the mutual agreement of an Acquired Fund and the Acquiring Fund or (b) at or prior to the Closing Date by either party (1) because of a breach by the other of any representation, warranty, or agreement contained in the Plan

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to be performed at or prior to the Closing Date, if not cured within 30 days, or (2) because a condition in the Plan expressed to be precedent to the obligations of the terminating party has not been met and it reasonably appears that it will not or cannot be met.

Whether or not each Reorganization is consummated, Gotham will bear the expenses incurred by the Funds in connection with the Reorganizations (including the cost of proxy solicitation).

If either of the Acquired Fund’s shareholders do not approve the Reorganization, the Trustees will consider other possible courses of action in the best interests of shareholders.

Description of the Securities to be Issued

Shareholders of each Acquired Fund as of the Closing Date will receive full and/or fractional shares of the Acquiring Fund shares in accordance with the procedures provided for in the Plan, as described above. The Acquiring Fund shares to be issued in connection with the Reorganizations will be fully paid and non-assessable when issued.

Federal Income Tax Consequences

Each Reorganization is intended to qualify for federal income tax purposes as a tax-free reorganization under Section 368(a) of the Internal Revenue Code (the “IRS Code”).  As a condition to the closing of each Reorganization, the Acquiring Fund and the Acquired Funds will have each received an opinion from Pepper Hamilton LLP to the effect that, on the basis of the existing provisions of the IRS Code, U.S. Treasury regulations issued thereunder, current administrative rules, pronouncements and court decisions, and certain representations made by the Funds, for federal income tax purposes, upon consummation of each Reorganization:

(a)                                  The acquisition by the Acquiring Fund of all of the assets of each Acquired Fund in exchange solely for the Acquiring Fund shares and the assumption by the Acquiring Fund of all of the liabilities of each Acquired Fund followed by the distribution of the Acquiring Fund shares by each Acquired Fund in complete liquidation to each Acquired Fund shareholders in exchange for their Acquired Fund shares, will constitute a “reorganization” within the meaning of Section 368(a) of the IRS Code, and each Acquiring Fund and each Acquired Fund will each be a “party to a reorganization” within the meaning of Section 368(b) of the IRS Code;

(b)                              Under Section 361 of the IRS Code, no gain or loss will be recognized by each of the  Acquired Funds (i) upon the transfer of all of each Acquired Fund’s assets to the Acquiring Fund solely in exchange for the Acquiring Fund shares and the assumption by the Acquiring Fund of all of the liabilities of each Acquired Fund or (ii) upon the distribution of the Acquiring Fund shares by each Acquired Fund to the Acquired Fund shareholders in complete liquidation.

(c)                                   Under Section 1032 of the IRS Code, no gain or loss will be recognized by the Acquiring Fund upon the receipt of all of the assets of each Acquired Fund solely in exchange for the Acquiring Fund shares and the assumption by the Acquiring Fund of all of the liabilities of each Acquired Fund;

(d)                              Under Section 354 of the IRS Code, no gain or loss will be recognized by Acquired Fund shareholders upon the exchange of all of their Acquired Fund shares for Acquiring Fund shares in liquidation of each Acquired Fund;

(e)                                   Under Section 358 of the IRS Code, the aggregate tax basis for the Acquiring Fund shares to be received by each of the Acquired Fund shareholders pursuant to the Reorganizations will be the same as the aggregate tax basis of the Acquired Fund shares held by such shareholder immediately prior to the Closing Date;

(f)                                    Under Section 1223(1) of the IRS Code, an Acquired Fund’s shareholder’s holding period for the Acquiring Fund shares to be received by each Acquired Fund shareholder will include the period during which the Acquired Fund shares exchanged therefor were held by such shareholder, provided that the Acquired Fund shareholder held the Acquired Fund shares as a capital asset on the Closing Date;

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(g)                                   Under Section 362(b) of the IRS Code, the tax basis of the assets of each Acquired Fund received by the Acquiring Fund will be the same as the tax basis of such assets in the hands of each of the Acquired Funds immediately prior to the Closing;

(h) Under Section 1223(2) of the IRS Code, the holding period of the assets of each of the Acquired Funds in the hands of the Acquiring Fund will include the period during which those assets were held by the Acquired Fund.

Pepper Hamilton will express no opinion as to (1) the effect of each Reorganization on (A) an Acquired Fund or the Acquiring Fund with respect to any asset as to which any unrealized gain or loss is required to be recognized for U.S. federal income tax purposes at the end of a taxable year (or on the termination or transfer thereof) under a mark-to-market system of accounting, (B) any Acquired Fund shareholder or Acquiring Fund shareholder that is required to recognize unrealized gains and losses for U.S. federal income tax purposes under a mark-to-market system of accounting, or (C) an Acquired Fund or the Acquiring Fund with respect to any stock held in a passive foreign investment company as defined in Section 1297(a) of the IRS Code or (2) any other federal tax issues (except those set forth above) and all state, local, or foreign tax issues of any kind.

Such opinion shall be based on customary assumptions, limitations and such representations as Pepper Hamilton may reasonably request, and the Acquired Funds and the Acquiring Fund will cooperate to make and certify the accuracy of such representations.  Such opinion may contain such assumptions and limitations as shall be in the opinion of such counsel appropriate to render the opinions expressed therein.  Notwithstanding anything in the Plan to the contrary, neither the Acquiring Fund nor the Acquired Funds may waive the conditions set forth above.

[In addition, as of [DATE], the Value 1000 Fund and Value Select Fund had capital loss carryforwards of [$          ] and [$          ], respectively.  These amounts are scheduled to expire in [        ] and [        ], respectively.  The amount of each Acquired Fund’s capital loss carryforwards calculated as of the date of each Reorganization available to offset the Acquiring Fund’s capital gains in any given year following each Reorganization may be substantially limited and the expiration of these carryforwards will be accelerated by one year as a consequence of the Reorganizations.]

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Pro Forma Capitalization

The following tables set forth, for each Reorganization, the capitalization of each Acquired Fund and the Acquiring Fund, and the capitalization of the Acquiring Fund on a pro forma basis as of the Record Date giving effect to the proposed acquisition of assets at net asset value. The following tables show the capitalization on a pro forma basis after giving effect to the proposed Reorganization between (a) the Value 1000 Fund and Acquiring Fund, (2) the Value Select Fund and Acquiring Fund, and (3) the Value 1000 Fund, the Value Select Fund and Acquiring Fund.

The tables above assume that the Reorganizations occurred on the Record Date. The tables are for informational purposes only. No assurance can be given as to how many Acquiring Fund shares will be received by shareholders of a Target Fund on the date that a Reorganization takes place, and the foregoing should not be relied upon to reflect the number of shares of Acquiring Fund that actually will be received on or after that date.

Distribution of Shares

Shares of the Funds are offered on a continuous basis by Foreside and are sold without any sales charges. Foreside sells shares of the Funds both directly and through financial advisors and financial intermediaries or through processing organizations.

The Acquiring Fund offers Institutional Class shares. The Acquired Funds each offer Class A and Class I shares. In the proposed Reorganizations, Class A and Class I shareholders of each Acquired Fund will receive Institutional Class shares of the Acquiring Fund. Institutional Class shares of the Acquiring Fund will be issued at net asset value upon consummation of the Reorganizations.

Each Acquired Fund has adopted a plan pursuant to Rule 12b-1 of the 1940 Act for its Class A shares, that allows a Fund to pay distribution and service fees for the sale and distribution of its shares and for services provided to its shareholders. The distribution plan for Class A shares provides for payments of up to 0.25% of the average daily net assets of a Fund’s Class A shares.

More detailed descriptions of the Acquiring Fund’s shares are contained in the Acquiring Fund’s Prospectus and the Gotham Fund SAI.

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Purchase and Redemption Procedures

The Acquired Funds and the Acquiring Fund have substantially similar purchase and redemption procedures. The minimum initial and subsequent purchase requirements for each Acquired Fund and the Acquiring Fund are presented in the table below:

For more information, see “Purchase of Shares” below. Each Fund’s shares may be redeemed by telephone, mail, or wire; or through accounts with certain brokers and other financial institutions. Payments for redemptions of shares of each Fund are usually made within one business day, but not later than seven calendar days after receipt of a proper redemption request. Each Fund reserves the right to redeem in-kind, under certain circumstances, by paying you the proceeds in liquid securities rather than in cash. Additional information concerning purchases and redemptions of shares, including how each Fund’s net asset value is determined, is contained in the section entitled “Additional Information about the Funds.” The Funds reserve the right to reject any purchase order.

Exchange Privileges

Shareholders may exchange Class A and Class I shares of an Acquired Fund for shares of the same class of the following funds offered by the Adviser:

Formula Investing U.S. Value 1000 Fund

Formula Investing U.S. Value Select Fund

Formula Investing International Value 400 Fund

Formula Investing International Value Select Fund

Shareholders may exchange Institutional Class shares of the Acquiring Fund for Institutional Class shares of the following funds offered by the Adviser:

Gotham Absolute Return Fund

Gotham Neutral Fund

There is no exchange fee for exchanging of shares. Exchange of shares of the Acquiring Fund for shares in another Gotham Fund is limited to four times per year, and not more frequently than once in any month. Additional information concerning the Funds’ exchange privileges is contained in the section entitled “Additional Information about the Funds.”

Dividend Policy

Each Fund has the same dividend distribution policy. Each Fund intends to distribute all of its income and capital gains. Dividends from net investment income and distributions of net capital gains, if any, are declared and paid annually to shareholders.

If shareholders of an Acquired Fund have elected to receive dividends or distributions in cash then that election will also apply to the Acquiring Fund after the Reorganization. Otherwise, all dividends and distributions are reinvested in additional shares.  Shareholder may change their elections before or after the Reorganizations.

The Funds have each qualified to be treated as a regulated investment company under the IRS Code. To remain qualified as a regulated investment company, a Fund must, among other things, distribute 90% of its taxable and tax-exempt income and diversify its holdings as required by the 1940 Act and the IRS Code. While so qualified, so long as each Fund distributes all of its net investment company taxable and tax-exempt income and any net

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realized gains to its shareholders of record, it is expected that the Funds will not be required to pay any federal income taxes on the amounts distributed to its shareholders of record.

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INFORMATION ON SHAREHOLDERS’ RIGHTS

Organization and Governing Law. The Trust is a SEC-registered, open-end management investment company that continuously offers shares to the public. The Trust is organized as a Delaware statutory trust, and each Fund is organized as series of the Trust pursuant to the Delaware Statutory Trust Act. The Funds are governed by a Declaration of Trust (a “Declaration”) and By-Laws, both as amended, restated or supplemented from time to time, and each Fund’s business and affairs are managed under the supervision of its Board of Trustees.

Each Fund is subject to the federal securities laws, including the 1940 Act, and the rules and regulations promulgated by the SEC thereunder.