# EDGAR Filing Document

**Accession Number:** 0001311981
**File Stem:** 0001162044-25-000705
**Filing Date:** 2025-7
**Character Count:** 196802
**Document Hash:** ccef28b1aeaec13d63aead8e843bd2f4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001162044-25-000705.hdr.sgml**: 20250729

**ACCESSION NUMBER**: 0001162044-25-000705

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 33

**FILED AS OF DATE**: 20250729

**DATE AS OF CHANGE**: 20250729

**EFFECTIVENESS DATE**: 20250801

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Adirondack Funds
- **CENTRAL INDEX KEY:** 0001311981

**ORGANIZATION NAME:**
- **EIN:** 201993634
- **STATE OF INCORPORATION:** OH
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-21691
- **FILM NUMBER:** 251160024

**BUSINESS ADDRESS:**
- **STREET 1:** 2390 WESTERN AVENUE
- **CITY:** GUILDERLAND
- **STATE:** NY
- **ZIP:** 12084
- **BUSINESS PHONE:** 518-690-0470

**MAIL ADDRESS:**
- **STREET 1:** 2390 WESTERN AVENUE
- **CITY:** GUILDERLAND
- **STATE:** NY
- **ZIP:** 12084
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Adirondack Funds
- **CENTRAL INDEX KEY:** 0001311981

**ORGANIZATION NAME:**
- **EIN:** 201993634
- **STATE OF INCORPORATION:** OH
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-121690
- **FILM NUMBER:** 251160023

**BUSINESS ADDRESS:**
- **STREET 1:** 2390 WESTERN AVENUE
- **CITY:** GUILDERLAND
- **STATE:** NY
- **ZIP:** 12084
- **BUSINESS PHONE:** 518-690-0470

**MAIL ADDRESS:**
- **STREET 1:** 2390 WESTERN AVENUE
- **CITY:** GUILDERLAND
- **STATE:** NY
- **ZIP:** 12084

## Series and Classes Contracts Data

### Adirondack Small Cap Fund (Series ID: S000004764)

| Class ID   | Class Name                | Ticker Symbol   |
|:---|:---|:---|
| C000012957 | Adirondack Small Cap Fund | ADKSX           |

?xml version='1.0' encoding='ASCII'? 485BPOS FILING

As filed with the Securities and Exchange Commission on July 29, 2025

Securities Act File No. 333-121690

Investment Company Act File No. 811-21691

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /

Pre-Effective Amendment No. / /

Post-Effective Amendment No. <u>34</u> / X /

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /

OF 1940

Amendment No. <u>36</u> / X /

(Check appropriate box or boxes.)

Adirondack Funds

(Exact Name of Registrant as Specified in Charter)

<u>2390 Western Avenue, Guilderland, NY 12084</u>

(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: <u>(518) 690-0470</u> 

Gregory A. Roeder, Adirondack Research and Management, Inc.

<u>2390 Western Avenue, Guilderland, NY 12084</u>

(Name and Address of Agent for Service)

With copy to:

JoAnn M. Strasser, Thompson Hine LLP

41 South High Street, 17th Floor, Columbus, OH 43215

It is proposed that this filing will become effective:

/ / immediately upon filing pursuant to paragraph (b)

/X/ on August 1, 2025 pursuant to paragraph (b)

/ / 60 days after filing pursuant to paragraph (a)(1)

/__/ on (date) pursuant to paragraph (a)(1)

/ / 75 days after filing pursuant to paragraph (a)(2)

/ / on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

/ / this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

**Adirondack Funds**

**The Adirondack Small Cap Fund**

**Ticker: (ADKSX)**

**Prospectus dated**

**August 1, 2025**

The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed on the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Table of Contents** |  |
| &nbsp;&nbsp;<u>Fund Summary</u> | &nbsp;&nbsp;1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Investment Objective</u>* | &nbsp;&nbsp;1 |
| &nbsp;&nbsp;<u>Fees and Expenses of the Fund</u> | &nbsp;&nbsp;1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Expense Example</u>* | &nbsp;&nbsp;1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Portfolio Turnover</u>* | &nbsp;&nbsp;2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Principal Investment Strategy</u> | &nbsp;&nbsp;2 |
| &nbsp;&nbsp;<u>Principal Risks of Investing in the Fund</u> | &nbsp;&nbsp;2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Risks in General</u>* | &nbsp;&nbsp;2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Risks of Investing in Common Stocks</u>* | &nbsp;&nbsp;2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Foreign Risk</u>* | &nbsp;&nbsp;3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Risks of Smaller-Sized Companies</u>* | &nbsp;&nbsp;3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Value Investing Risk</u>* | &nbsp;&nbsp;3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Sector Risk</u>* | &nbsp;&nbsp;3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Fund Management Risk</u>* | &nbsp;&nbsp;3 |
| &nbsp;&nbsp;<u>Performance</u> | &nbsp;&nbsp;4 |
| &nbsp;&nbsp;<u>Additional Information on Investment Objective, Strategies and Risks</u> | &nbsp;&nbsp;7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Investment Objective</u> | &nbsp;&nbsp;7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Principal Investment Strategies</u> | &nbsp;&nbsp;7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Principal Risks of Investing in the Fund</u> | &nbsp;&nbsp;8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Risks in General</u>* | &nbsp;&nbsp;8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Risks of Investing in Common Stocks</u>* | &nbsp;&nbsp;8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Foreign Risk</u>* | &nbsp;&nbsp;8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Risks of Smaller-Sized Companies</u>* | &nbsp;&nbsp;8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Value Investing Risk</u>* | &nbsp;&nbsp;9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Sector Risk</u>* | &nbsp;&nbsp;9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Fund Management Risk</u>* | &nbsp;&nbsp;9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Disclosure of Portfolio Holdings</u>* | &nbsp;&nbsp;9 |
| &nbsp;&nbsp;<u>Investment Advisor</u> | &nbsp;&nbsp;9 |
| &nbsp;&nbsp;<u>Shareholder Information</u> | &nbsp;&nbsp;11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<u>Who should invest?</u>* | &nbsp;&nbsp;11 |
| &nbsp;&nbsp;<u>How to Purchase Shares</u> | &nbsp;&nbsp;11 |
| &nbsp;&nbsp;<u>How Net Asset Value is Determined</u> | &nbsp;&nbsp;12 |
| &nbsp;&nbsp;<u>Transactions through Brokers and Other Intermediaries</u> | &nbsp;&nbsp;13 |
| &nbsp;&nbsp;<u>Minimum Investment</u> | &nbsp;&nbsp;13 |
| &nbsp;&nbsp;<u>Householding</u> | &nbsp;&nbsp;14 |
| &nbsp;&nbsp;<u>How to Redeem Shares</u> | &nbsp;&nbsp;14 |
| &nbsp;&nbsp;<u>Tax-Deferred Retirement Plans</u> | &nbsp;&nbsp;15 |
| &nbsp;&nbsp;<u>Dividends and Distributions</u> | &nbsp;&nbsp;16 |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;<u>Taxes</u> | &nbsp;&nbsp;16 |
| &nbsp;&nbsp;<u>Frequent Purchases and Sales of Fund Shares</u> | &nbsp;&nbsp;17 |
| &nbsp;&nbsp;<u>Cybersecurity</u> | &nbsp;&nbsp;17 |
| &nbsp;&nbsp;<u>Financial Highlights</u> | &nbsp;&nbsp;19 |
| &nbsp;&nbsp;Privacy Notice | &nbsp;&nbsp;20 |
| &nbsp;&nbsp;Where to Obtain More Information | &nbsp;&nbsp;Back Cover |

---

**Fund Summary**

***Investment Objective***

The objective of the Fund is long-term capital appreciation.

**Fees and Expenses of the Fund**

The following table describes the fees and expenses that you will pay if you buy, hold and sell shares of The Adirondack Small Cap Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and example below.**

Shareholder Fees (Fees Paid directly from your investment):

---

| |
|:---|
| Maximum Sales Charge (Load) Imposed on Purchases |
| Maximum Deferred Sales Charge (Load) |
| Maximum Sales Charge (Load) on Reinvested Dividends |
| Redemption Fee |
| Exchange Fee |

---

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):

---

| | |
|:---|:---|
| Management Fees | 1.08% |
| Distribution (and/or Service) (12b-1) Fees |  |
| Other Expenses | 0.45% |
| Total Annual Fund Operating Expenses | <u>1.53%</u> |
| Fee Waiver and/or Expense Reimbursement <sup>(1)</sup> | <u>(0.05%)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Annual Fund Operating Expenses After Fee Waiver and/or<br> Expense Reimbursement | <u>1.48%</u> |

---

(1) The Fund's advisor, Adirondack Research and Management, Inc. (the "Advisor"),
has contractually agreed to waive management fees and/or reimburse the Fund expenses it incurs, but only to the extent necessary to maintain
the Fund's total annual operating expenses (excluding brokerage costs, borrowing costs (such as interests and dividends on securities
sold short), taxes, extraordinary expenses, and costs of acquired funds) at 1.48% of its average daily net assets until August 1, 2026.
The agreement may be terminated by the Fund's Board of Trustees on 60 days' written notice to the Advisor. Any waiver or reimbursement
by the Advisor is subject to repayment by the Fund within three years after the waived or reimbursed expenses occurred, if the Fund is
able to make the repayment without exceeding the lesser of its current expense limitation or the expense limitation in effect at the time
of the reduction, and the repayment is approved by the Board of Trustees.

***Expense Example:***

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods

indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | |
|:---|:---|:---|:---|
| **<u>1 year</u>** | **<u>3 years</u>** | **<u>5 years</u>** | **<u>10 years</u>** |
| $151 | $478 | $829 | $1819 |

---

***Portfolio Turnover***:

The 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 annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 38.91% of the average value of its portfolio.

**Principal Investment Strategy**

The Fund seeks to achieve its objective by investing in a diversified portfolio of undervalued common stocks of small capitalization companies as determined by the Advisor. Small capitalization companies are defined by the Advisor as issuers that, at the time of initial purchase, have a market capitalization below $7 billion. Under normal circumstances, at least 80% of the Fund's assets will be invested in common stocks of small capitalization companies. The Fund may invest up to 15% of its assets in sponsored American Depositary Receipts ("ADRs") issued by foreign companies. The Advisor employs a contrarian selection strategy, which primarily focuses on out-of-favor securities. Market expectations for such companies are low, resulting in attractive valuations in certain cases. To find such stocks, the Advisor uses screens that include key valuation metrics such as price-to-book value, price-to-cash flow, price-to-revenue and price-to-earnings. The Advisor establishes price targets before securities are purchased and re-evaluates these price targets quarterly, or more frequently if conditions warrant. When price targets are reached, the position is sold. In addition, the Advisor will reduce positions that exceed 5% of the portfolio and sell those securities when the original investment rationale is no longer justified due to either company specific or industry issues.

**Principal Risks of Investing in the Fund**

***Risks in General***

Domestic economic growth and market conditions, interest rate levels, political events, tariffs and trade wars, climate change and climate-related events, and global pandemics are among the factors affecting the Fund's investments. There is risk that these and other factors may adversely affect the Fund's performance. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. You may lose money by investing in the Fund.

 ****

***Risks of Investing in Common Stocks***

The Fund invests primarily in common stocks, which subjects the Fund and its shareholders to the risks associated with common stock investing. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability, and the general risk that domestic and global economies may go through periods of decline and cyclical change.

***Foreign Risk***

To the extent the Fund invests in foreign securities by purchasing ADRs, the Fund may be subject to risks not usually associated with owning securities of U.S. issuers. These risks can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and taxation issues.

***Risks of Smaller-Sized Companies***

To the extent the Fund invests in the stocks of smaller-sized companies, the Fund may be subject to additional risks. The earnings and prospects of these companies are more volatile than larger companies. Smaller-sized companies may experience higher failure rates than do larger companies. Smaller-sized companies may have limited markets, product lines or financial resources and may lack management experience.

***Value Investing Risk***

Value investing attempts to identify companies selling at a discount to their intrinsic value. Value investing may also involve the purchase of securities that are disfavored in the market or companies whose value the Advisor believes is not fully recognized by the investing public. Value investing is subject to the risk that a company's intrinsic value may never be fully realized by the market or that a company judged by the Advisor to be undervalued may actually be appropriately priced.

***Sector Risk***

Sector risk is the possibility that stocks within the same group of industries will decline in price due to sector-specific market or economic developments. If the Advisor invests a significant portion of its assets in a particular sector, the Fund is subject to the risk that companies in the same sector are likely to react similarly to legislative or regulatory changes, adverse market conditions and/or increased competition affecting that market segment. Similarly, focusing on investments in certain industries subjects the Fund to the risk that companies in that industry are likely to react similarly to legislative or regulatory changes, adverse market conditions and/or increased competition affecting that market segment.

***Fund Management Risk***

The Advisor's strategy of investing in undervalued securities may fail. The Advisor may be incorrect in its assessment of the intrinsic value of the companies in which the Fund invests, or value stocks may be out of favor with investors. The Fund may underperform and you may lose money.

**Performance**

**Risk/Return Bar Chart and Table** 

The bar chart and performance table below show the variability of the returns of the Fund, which is one indicator of the risks of investing in the Fund. The bar chart shows changes in the annual returns of the Fund for each full calendar year of operations. The performance table shows how the Fund's average annual total returns compare to those of a broad-based securities market index. The Fund's past performance (before and after taxes) does not necessarily reflect how the Fund will perform in the future. Updated performance information is available at www.adirondackfunds.com/fund-performance/ or by calling 1-888-686-2729.

**Year-by-Year Total Returns for years ended 12/31**

During the periods shown in the bar chart, the highest quarterly return was 35.46% for the quarter ended December 31, 2020 and the lowest quarterly return was -36.25% for the quarter ended March 31, 2020. The return for the period from January 1, 2025 to June 30, 2025 was -2.02%.

**Average Annual Total Returns as of December 31, 2024**

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| Return Before Taxes | 19.55% | 12.96% | 7.36% |
| Return After Taxes on Distributions | 19.55% | 12.95% | 6.55% |
| Return After Taxes on Distributions and Sale of Fund Shares | 11.58% | 10.39% | 5.63% |
| Standard & Poor's 500 Index (reflects no deductions for fees, expenses or taxes) \* | 24.79% | 14.51% | 13.09% |
| Morningstar US Small Cap Broad Value Extended Index (reflects no deductions for fees, expenses or taxes) \*\* | 9.27% | 8.98% | 7.52% |
| iShares Russell 2000 Value ETF \*\*\* | 7.74% | 7.05% | 6.96% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

---

| | |
|:---|:---|
| (\*) | In order to comply with the definition and intent set forth by the U.S. Securities and Exchange Commission, the Fund has changed its broad-based securities market index (benchmark index) from the Morningstar US Small Cap Broad Value Extended Index (MSI) to the Standard & Poor's 500 Index. The Standard & Poor's 500 Index is a market value-weighted index of 500 stocks seen as indicators of U.S. equities. You cannot invest directly in an index. |

---

---

| | |
|:---|:---|
| (\*\*) | In addition, the Fund compares itself to the MSI. The Fund believes the MSI's comprehensive and consistent tracking of the United States small cap equity universe is closer to that of the Fund. Therefore, the Fund believes the MSI is a better indicator for investors as to the performance of the Fund versus the broader United States small cap equity market. More information about Morningstar Indices can be found at https://indexes.morningstar.com/. |

---

---

| | |
|:---|:---|
| (\*\*\*) | The Fund also compares itself to the iShares Russell 2000 Value ETF (IWN). The iShares Russell 2000 Value ETF (IWN) represents a realistic alternative for retail investors when deciding between active or passive small cap investing. It also leads to more fair (real world) return comparisons as iShares managers face similar administrative cost, liquidity, and taxation constraints when implementing this index replicating strategy as do active managers. The IWN was launched in 2000 by Barclay's (Now BlackRock Fund Advisors) and is the largest fund available to investors that replicates the Russell 2000 Value Index (RUJ). Its assets are presently over $10.9 billion. |

---

***Investment Advisor****:* Adirondack Research & Management Inc.

***Investment Advisor Portfolio Managers****:* Matthew P. Reiner and Gregory Roeder are the Fund's Portfolio Managers and have been since 2005 and 2006, respectively.

***Purchase and Sale of Fund Shares****:* The minimum initial investment is $3,000 and subsequent investments must total at least $50. You may redeem shares of the Fund on each day that the Fund is

open for business by sending a written request to the Fund at 8000 Town Centre Drive, Suite 400, Broadview Heights, OH 44147.

***Tax Information****:* Distributions are taxable to you at ordinary income or capital gains tax rates, unless you are investing through a tax deferred arrangement, such as a 401(k) plan or individual retirement account.

***Payments to Broker-Dealers and Other Financial Intermediaries****:* If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and/or related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

**Additional Information on Investment Objective, Strategies and Risks**

**Investment Objective**

The objective of the Fund is long-term capital appreciation. The Board of Trustees may change the objective without shareholder approval. If the Fund decides to change its investment objective, shareholders will be given 60 days' advance notice.

**Principal Investment Strategies** 

The Fund seeks to achieve its objective by investing in a diversified portfolio of undervalued common stocks of small capitalization companies as determined by the Advisor. Small capitalization companies are defined by the Advisor as issuers that, at the time of initial purchase, have a market capitalization below $7 billion. Under normal circumstances, at least 80% of the Fund's total assets will be invested in common stocks of small capitalization companies. The Fund invests primarily in the common stock of domestic companies, but may occasionally invest up to 15% of its total assets in sponsored ADRs issued by foreign companies. During periods in which suitable undervalued equity securities are not available, up to 20% of the Fund's total assets may be invested in money-market securities and/or shares of investment companies with investment objectives and principal investment strategies similar to those of the Fund.

The Advisor employs a contrarian selection strategy, which primarily focuses on out-of-favor securities. Market expectations for such companies are low, resulting in attractive valuations in certain cases. The Advisor analyzes the collection of out-of-favor stocks and selects those the Advisor believes are in the best position to address company and/or industry specific issues and regain investor support.

To find such stocks, the Advisor uses screens that include key valuation metrics such as price-to-book value, price-to-cash flow, price-to-revenue and price-to-earnings. Securities identified by screens then undergo a more comprehensive review, which includes a detailed assessment of the company's management, strategy, financial statements and competition. The Advisor purchases a position for the Fund after extensive due diligence results in a belief that the company will significantly improve operating results within two or three years.

Monitoring existing positions, regularly assessing industry risks and adjusting the portfolio accordingly are also integral components of the investment approach. The Advisor believes a well-conceived exit strategy is an essential part of the risk management process. The Advisor establishes price targets before securities are purchased and re-evaluates these price targets quarterly, or more frequently if conditions warrant. When price targets, are reached the position is sold. In addition, the Advisor will reduce positions that exceed 5% of the portfolio and sell those securities when the original investment rationale is no longer justified due to either company specific or industry issues.

From time to time, the Fund may take temporary defensive positions, which are inconsistent with the Fund's principal investment strategies, in attempting to respond to adverse market, economic, political, or other conditions. For example, the Fund may hold all or a portion of its assets in money market instruments, including cash, cash equivalents, U.S. government securities, other investment grade fixed

income securities, certificates of deposit, bankers acceptances, commercial paper, money market funds and repurchase agreements. If the Fund invests in a money market fund, the shareholders of the Fund generally will be subject to duplicative management fees. As a result of engaging in these temporary measures, the Fund may not achieve its investment objective. The Fund may also invest in money market instruments at any time to maintain liquidity or pending selection of investments in accordance with its policies.

**Principal Risks of Investing in the Fund**

***Risks in General***

Domestic economic growth and market conditions, interest rate levels, political events, climate change and climate-related events, tariffs and trade wars, and global pandemics are among the factors affecting the Fund's investments. There is risk that these and other factors may adversely affect the Fund's performance. You should consider your own investment goals, time horizon, and risk tolerance before investing in the Fund. An investment in the Fund may not be appropriate for all investors and is not intended to be a complete investment program. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. You may lose money by investing in the Fund.

***Risks of Investing in Common Stocks***

The Fund invests primarily in common stocks, which subjects the Fund and its shareholders to the risks associated with common stock investing. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability, and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect the performance of each company in which the Fund invests, including the strength of the company's management or the demand for its products or services. You should be aware that a company's share price may decline as a result of poor decisions made by its management or lower demand for the company's products or services. In addition, a company's share price may also decline if its earnings or revenues fall short of expectations. There are overall stock market risks that may also affect the value of the Fund. Over time, the stock markets tend to move in cycles, with periods when stock prices rise generally and periods when stock prices decline generally. The value of the Fund's investments may increase or decrease more than the stock markets in general.

***Foreign Risk***

To the extent the Fund invests in foreign securities by purchasing ADRs, the Fund may be subject to risks not usually associated with owning securities of U.S. issuers. These risks can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and taxation issues.

***Risks of Smaller-Sized Companies***

To the extent the Fund invests in the stocks of smaller-sized companies, the Fund may be subject to additional risks. The earnings and prospects of these companies are more volatile than larger companies. Smaller-sized companies may experience higher failure rates than do larger companies. The trading volume of securities of smaller-sized companies is normally less than that of larger companies and,

therefore, may disproportionately affect their market price, tending to make the share price fall more in response to selling pressure than is the case with larger companies. Smaller-sized companies may have limited markets, product lines or financial resources and may lack management experience.

***Value Investing Risk***

Value investing attempts to identify companies selling at a discount to their intrinsic value. Value investing may also involve the purchase of securities that are disfavored in the market or companies whose value the Advisor believes is not fully recognized by the investing public. Value investing is subject to the risk that a company's intrinsic value may never be fully realized by the market or that a company judged by the Advisor to be undervalued may actually be appropriately priced.

***Sector Risk***

Sector risk is the possibility that stocks within the same group of industries will decline in price due to sector-specific market or economic developments. If the Advisor invests a significant portion of its assets in a particular sector, the Fund is subject to the risk that companies in the same sector are likely to react similarly to legislative or regulatory changes, adverse market conditions and/or increased competition affecting that market segment. Similarly, focusing on investments in certain industries, such as the technology industry, subjects the Fund to the risk that companies in that industry are likely to react similarly to legislative or regulatory changes, adverse market conditions and/or increased competition affecting that market segment. There is also the risk that the products or services offered by these companies will not meet expectations or even reach the marketplace. These risks may be increased to the extent that the Fund's portfolio is overweighted in a certain business segment of the technology industry. The sectors in which the Fund may be overweighted will vary.

***Fund Management Risk***

The Advisor's strategy of investing in undervalued securities may fail. The Advisor may be incorrect in its assessment of the intrinsic value of the companies in which the Fund invests, or value stocks may be out of favor with investors. The Fund may underperform and you may lose money.

***Disclosure of Portfolio Holdings***

A description of the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio securities is available in the Fund's Statement of Additional Information.

**Investment Advisor**

The investment advisor of the Fund is Adirondack Research & Management Inc., a New York corporation located at 2390 Western Avenue, Guilderland, NY 12084. The Advisor serves the Fund pursuant to a management agreement that continued in effect for the first two years and is renewable on an annual basis by a vote of a majority of the Board of Trustees, including a majority of the trustees of the Trust who are not "interested persons" as that term is defined in the Investment Company Act of 1940, as amended, cast in person at a meeting called for the purpose of voting on such renewal. Under the terms of this agreement, the Advisor is responsible for formulating the Fund's investment policies, making ongoing investment decisions and engaging in portfolio transactions. The Advisor provides office space,

services and equipment and supervises all matters relating to the Fund's operations. The Advisor receives an annual advisory fee of 1.08% of the Fund's average daily net assets. For the year ended March 31, 2025, the Advisor earned advisory fees of $413,352. A description of the Board of Trustees' deliberations in renewing the management agreement is included in the Fund's Form N-CSR for the period ended September 30, 2024.

The Advisor has contractually agreed to waive its management fees and/or reimburse the Fund expenses it incurs, but only to the extent necessary to maintain the Fund's total annual operating expenses (excluding brokerage costs, borrowing costs (such as interest and dividends on securities sold short), taxes, extraordinary expenses, and costs of acquired funds) at 1.48% of its average daily net assets until August 1, 2026. The agreement may be terminated by the Fund's Board of Trustees on 60 days' written notice to the Advisor. Any waiver or reimbursement by the Advisor is subject to repayment by the Fund within three years after the waived or reimbursed expenses occurred, if the Fund is able to make the repayment without exceeding the lesser of its current expense limitation or the expense limitation in effect at the time of the reduction, and the repayment is approved by the Board of Trustees. For the year ended March 31, 2025, the Advisor deferred $19,643 in management fees pursuant to this agreement. The Advisor (not the Fund) may pay certain financial institutions (which may include banks, brokers, securities dealers and other industry professionals) a fee for providing distribution related services and/or for performing certain administrative servicing functions for Fund shareholders to the extent these institutions are allowed to do so by applicable statute, rule or regulation. The Fund may from time to time purchase securities issued by financial institutions that provide such services; however, in selecting investments for the Fund, no preference will be shown for such securities.

Mr. Matthew P. Reiner and Mr. Gregory Roeder are the portfolio managers responsible for the day-to-day management of the Fund.

**Matthew P. Reiner, CFA** – Joined the Advisor in February 2005 as principal, chief investment officer and co-portfolio manager of The Adirondack Small Cap Fund. He has over 30 years of experience in the financial services industry. Previously, Matt was an institutional portfolio manager and vice president of research at Paradigm Capital Management. He began his investment career with CL King & Associates as a sell-side research associate and later as an equity analyst. Matt earned his MBA from the University at Albany and his undergraduate degree from the State University of New York at Plattsburgh. He has been a holder of the Chartered Financial Analyst designation since 1999.

**Gregory A. Roeder, CFA** – Founded the Advisor in 2004 and currently serves as co-portfolio manager of The Adirondack Small Cap Fund. Prior to founding the Advisor, Greg served 18 years in various capacities within the financial services industry. His experience includes analyst/portfolio manager for Eddy & Wakefield, equity research analyst for CL King and Associates and assorted roles within KeyCorp's credit/risk management groups. Greg graduated from the State University of New York at Plattsburgh with a bachelor's degree in economics and Hofstra University with a master's degree in finance. Greg has been a holder of the Chartered Financial Analyst designation since 2002.

The Fund's Statement of Additional Information provides information about the Advisor and about each portfolio manager's compensation, other accounts managed by each portfolio manager, and each portfolio manager's ownership of Fund shares.

**Shareholder Information**

***Who should invest?***

***Long–Term Investors***

This Fund is intended to be a long-term investment vehicle and is not designed to provide investors a way to speculate on short-term stock market movements.

***Diversified Investors***

Investors should maintain diversified holdings of securities and not consider this Fund as their sole source of equity exposure.

***Risk Tolerant Investors***

This Fund will be comprised mostly of investments in smaller publicly-traded companies with market capitalizations below $7 billion. Smaller companies are often characterized by modest trading volume, earnings volatility and limited research coverage. As such, the share prices of these securities may vary significantly from day-to-day. Investors should be prepared for such unpredictability, as this Fund will likely be more volatile than those funds that invest in securities of larger issuers.

**How to Purchase Shares**

You may purchase shares on any business day. This includes any day the Fund is open for business, other than weekends and days on which the New York Stock Exchange ("NYSE") is closed, including New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Shares may be purchased directly from the Fund by sending a completed application and a check in the amount of your investment to the addresses below. Your check should be made payable to the "Adirondack Small Cap Fund." Cash, third-party checks and traveler's checks are not accepted. Eligible purchases must meet applicable minimum investment requirements. All investments must be in U.S. dollars, and the checks must be drawn on a U.S. bank. All purchases of shares will be made at the next calculated net asset value ("NAV") after a completed order is received by the Fund or its agent. The Fund does not issue share certificates. You will receive quarterly statements and a confirmation of each transaction. You should verify the accuracy of all transactions in your account as soon as you receive your confirmation.

**<u>Regular Mail:</u>**

c/o The Adirondack Small Cap Fund

Mutual Shareholder Services, LLC

8000 Town Centre Drive, Suite 400

Broadview Heights, OH 44147

**<u>By Wire Transfer:</u>**

You may purchase shares directly through the Fund's Transfer Agent or through a brokerage firm or other financial institution that has agreed to sell the Fund's shares. If you are investing directly in the Fund for the first time, you will need to establish an account by completing a Shareholder Account Application. To establish an IRA, complete an IRA Application. To request an application or arrange for a purchase by wire, call toll-free 1-888-686-2729.

You also may purchase Fund shares by making automatic periodic investments from your bank account. To use this feature, select the automatic investment option in the account application and provide the necessary information about the bank account from which your investments will be made. You may revoke your election to make automatic investments by calling 1-888-686-2729 or by writing to the Fund at:

The Adirondack Small Cap Fund

c/o Mutual Shareholder Services, LLC

8000 Town Centre Drive, Suite 400

Broadview Heights, OH 44147

A $20 fee will be charged against your account for any payment check returned to the Transfer Agent or for any incomplete electronic fund transfer, or for insufficient funds, stop payment, closed account or other reasons. If a check does not clear your bank, the Fund reserves the right to cancel the purchase. If your purchase is canceled, you will be responsible for any losses to the Fund or fees imposed by your bank. The Fund (or Fund agent) has the authority to redeem shares in your account(s) to cover any losses due to fluctuations in share price. Any profit on such cancellation will accrue to the Fund. Your investment in the Fund should be intended to serve as a long-term investment vehicle. The Fund is not designed to provide you with a means of speculating on the short-term fluctuations in the stock market. The Fund reserves the right to reject any purchase request that it regards as disruptive to the efficient management of the Fund, which includes investors with a history of excessive trading. The Fund also reserves the right to stop offering shares at any time.

**IMPORTANT INFORMATION ABOUT PROCEDURES** <br> **FOR OPENING A NEW ACCOUNT**<br>*To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. This means that, when you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask for identifying documents and may take additional steps to verify your identity. We may not be able to open an account or complete a transaction for you until we are able to verify your identity.*<br>

**How Net Asset Value is Determined**

The value of a single share of the Fund is known as its "net asset value" per share or "NAV." The Fund's NAV per share is normally calculated as of the close of the regular session of trading on the NYSE (normally 4:00 p.m., Eastern Time) on each weekday except New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Fund's NAV may be calculated earlier, however, if the NYSE closed early, trading on the NYSE is restricted or as permitted by the Securities and Exchange Commission ("SEC"). Transactions are processed at the NAV next calculated after the Fund (or an authorized broker, financial intermediary, or their authorized designee) receives the order.

The Fund's NAV is determined by taking the market value of all securities owned by the Fund (plus all other assets such as cash), subtracting all liabilities and then dividing the result (net assets) by the number of shares outstanding.

The Fund's securities are valued primarily on the basis of market quotations. If market prices are not available or, in the opinion of the Fund's Board of Trustees, market prices do not reflect fair value, or if an event occurs after the close of trading (but prior to the time the NAV is calculated) that materially affects fair value, the Board of Trustees may value the Fund's assets at their fair value according to procedures approved by the Board of Trustees. For example, if trading in a thinly traded portfolio security is halted and does not resume before the Fund calculates its NAV, the Board of Trustees may need to price the security using the Fund's fair value pricing guidelines. Without a fair value price, short-term traders could take advantage of the arbitrage opportunity and dilute the NAV of long-term investors. Fair valuation of a Fund's portfolio securities can serve to reduce arbitrage opportunities available to short-term traders, but there is no assurance that fair value pricing policies will prevent dilution of the Fund's NAV by short-term traders.

To the extent the Fund invests in other investment companies, the NAV of the investment companies in which the Fund invests will be included in the calculation of the Fund's NAV. The prospectuses of those investment companies explain the circumstances under which those investment companies will use fair value pricing and the effects of using fair value pricing.

**Transactions through Brokers and Other Intermediaries**

The Fund has authorized brokerage firms and other financial intermediaries to receive purchase and redemption orders on the Fund's behalf. These brokers and financial intermediaries may designate other intermediaries to receive purchase and redemption orders on the Fund's behalf. If you buy or sell shares through a brokerage firm or other financial intermediary, the policies and fees may be different than those described here. They may charge transaction and other fees and may set different minimum investments or limitations on buying or selling shares. Consult a representative of your financial institution if you have any questions. The Fund will be deemed to have received a purchase or redemption order when the authorized broker, financial intermediary, or authorized designee receives the order. Your financial institution is responsible for transmitting your order in a timely manner.

**Minimum Investment**

The minimum initial investment is $3,000 and subsequent investments must total at least $50. The minimum initial investment requirement for tax qualified retirement plans is $1,000 with no minimum for subsequent investments. See "How to Purchase Shares." The Fund reserves the right to change these minimums at any time.

The required minimum initial investment (for both regular accounts and tax qualified retirement plans) has been temporarily waived until August 1, 2026 for shareholders that are new to the Fund and that open their accounts with the automatic investment option.

**Householding**

To reduce expenses, we mail only one copy of the prospectus and each annual and semi-annual report to those addresses shared by accounts that have requested paper copies of these documents. If you wish to receive individual copies of these documents, please call the Fund at 1-888-686-2729 or contact your financial institution. We will begin sending you individual copies thirty days after receiving your request.

**How to Redeem Shares**

The Fund typically expects that it will take up to seven days following the receipt of your redemption request to pay out redemption proceeds by check or electronic transfer, except as noted below. The Fund typically expects to pay redemptions from cash, cash equivalents, proceeds from the sale of Fund shares, and then from the sale of portfolio securities. These redemption payment methods will be used in regular and stressed market conditions.

You may redeem shares of the Fund on each day that the Fund is open for business by sending a written request to the Fund at 8000 Town Centre Drive, Suite 400, Broadview Heights, OH 44147. The request must state the number of shares or the dollar amount to be redeemed and your account number. The request must be signed exactly as your name appears on the Fund's account records.

You may redeem any part of your account in the Fund by calling the Fund's Transfer Agent at 1-888-686-2729. You must first complete the Optional Telephone Redemption section of the investment application to institute this option. The Fund and the Transfer Agent are not liable for following redemption instructions communicated by telephone to the extent that they reasonably believe the telephone instructions to be genuine. However, if they do not employ reasonable procedures to confirm that

telephone instructions are genuine, they may be liable for any losses due to unauthorized or fraudulent instructions. Procedures employed may include recording telephone instructions and requiring a form of personal identification from the caller.

The Fund or the Transfer Agent may terminate the telephone redemption procedures at any time. During periods of extreme market activity, it is possible that shareholders may encounter some difficulty in telephoning the Fund, although neither the Fund nor the Transfer Agent has ever experienced difficulties in receiving and in a timely fashion responding to telephone requests for redemptions. If you are unable to reach the Fund by telephone, you may request a redemption by mail.

A signature guarantee of each owner is required to redeem shares in the following situations:

&nbsp;&nbsp;&nbsp;&nbsp;· if you change ownership on your account,

&nbsp;&nbsp;&nbsp;&nbsp;· if you request the redemption proceeds be sent to a different address than that registered on the account,

&nbsp;&nbsp;&nbsp;&nbsp;· if a change of address request has been received by the Transfer Agent within the last 15 days, or

&nbsp;&nbsp;&nbsp;&nbsp;· if you wish to redeem $25,000 or more from any shareholder account.

Signature guarantees are available from most banks, broker-dealers, municipal securities brokers and dealers, government securities brokers and dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. A notary public is not an acceptable guarantor.

You may request that redemption proceeds be wired directly to your existing account in any commercial bank or brokerage firm in the United States. The Fund will not wire redemption proceeds to third parties except to financial intermediaries for the benefit of shareholder(s) of record. There is currently a $20 charge for processing wire redemptions. All charges will be deducted from your account by redemption of shares in your account. Your bank or brokerage firm may also impose a charge for processing the wire. In the event that wire transfer of funds is impossible or impractical, the redemption proceeds will be sent by mail to the designated account address.

You may also redeem shares by placing a wire redemption through a securities broker or dealer. Broker-dealers may impose a fee on the shareholder for this service. It is the responsibility of broker-dealers to properly transmit wire redemption orders.

You will receive the NAV per share next determined after receipt by the Fund or its agent of your redemption request in the form described above. The Fund will not make checks for redemption proceeds payable to third parties except to financial intermediaries for the benefit of shareholder(s) of record. Payment will be effected within seven days after tender in such form, provided that payment in redemption of shares purchased by check will be effected only after the check has been collected, which may take up to fifteen days from the purchase date. To eliminate this delay, you may purchase shares of the Fund by certified check or wire.

At the discretion of the Fund, corporate investors and other associations may be required to furnish an appropriate certification authorizing redemptions to ensure proper authorization. The Fund reserves the right to require you to close your account if at any time the value of your shares is less than $1,000

(based on actual amounts invested, unaffected by market fluctuations), or such other minimum amount as the Fund may determine from time to time. After notification to you of the Fund's intention to close your account, you will be given 60 days to increase the value of your account to the minimum amount.

The Fund reserves the right to suspend the right of redemption or to postpone the date of payment for more than seven days when: (i) trading on the NYSE is restricted; (ii) the NYSE is closed (other than weekend and holiday closings); (iii) an emergency exists, as determined by the SEC; or (iv) the SEC has permitted a suspension. All shares of the Fund are also subject to involuntary redemption if the Board of Trustees determines to liquidate the Fund. Any involuntary redemption will create a capital gain or loss, which may have tax consequences about which you should consult your tax advisor.

**Tax-Deferred Retirement Plans**

The Fund's Individual Retirement Account ("IRA") application and additional forms required may be obtained by contacting the Fund at 1-888-686-2729. For IRAs, the initial minimum investment is $1,000 with no minimum for subsequent contributions. The account will be maintained by the custodian, which currently charges an annual maintenance fee of $8, which is subject to change.

Investors who are self-employed may purchase shares of the Fund through tax-deductible contributions to retirement plans for self-employed persons, known as Keogh or H.R. 10 plans. However, the Fund does not currently act as a sponsor or administrator for such plans. Fund shares may also be purchased for other types of qualified pension or profit sharing plans which are employer-sponsored, including deferred compensation or salary reduction plans known as "401(k) Plans" which give participants the right to defer portions of their compensation for investment on a tax-deferred basis until distributions are made from the plan.

**Dividends and Distributions**

The Fund expects that distributions to shareholders will consist primarily of capital gains, and that it will distribute substantially all of its net investment income and net realized gains, if any, annually. Dividends and distributions are automatically reinvested in additional shares of the Fund (the Share Option) unless cash payments are specified on your application or are otherwise requested by written instructions to the Fund.

If you elect to receive dividends in cash and the U.S. Postal Service cannot deliver your checks or if your checks remain un-cashed for six months, your dividends will be reinvested in your account at the then-current NAV and your account will be converted to the Share Option.

**Taxes**

The following discussion relates solely to the federal income tax treatment of dividends and distributions by the Fund. Investors should consult a tax advisor for the application of tax laws to their particular situations.

The Fund has qualified and intends to continue to qualify as a "regulated investment company" under Subchapter M of the Code by annually distributing substantially all of its net investment company taxable income and net capital gains in dividends to its shareholders and by satisfying certain other requirements.

By so qualifying, the Fund will not be subject to federal income tax or excise tax based on net income on that part of its investment company taxable income and net realized short-term and long-term capital gains which it distributes to its shareholders in accordance with the Code's requirements.

Dividends and distributions paid to shareholders are generally subject to federal income tax and may be subject to state and local income tax. Dividends from net investment income and distributions from any excess of net realized short-term capital gains over net realized capital losses are currently taxable to shareholders as ordinary income.

Distributions of net capital gains by the Fund to its shareholders are taxable to the recipient shareholders as long-term capital gains, without regard to the length of time a shareholder has held Fund shares. Redemptions of shares of the Fund are taxable events on which a shareholder may realize a gain or loss. To avoid a 24% federal backup withholding tax requirement on dividends, distributions and redemption proceeds, individuals and other non-exempt shareholders must certify their taxpayer identification number to the Fund on the investment application. A shareholder may also be subject to backup withholding if the Internal Revenue Service notifies the Fund that the shareholder is subject to backup withholding for previous under-reporting of interest or dividend income. Amounts withheld by the Fund are applied to the shareholder's federal income tax liability. Foreign shareholders may be subject to federal income tax withholding of up to 30% of dividends, distributions and redemption proceeds from the Fund.

Reports containing appropriate federal income tax information (relating to the tax status of dividends and capital gain distributions by the Fund) will be furnished to each shareholder not later than 30 days following the close of the calendar year during which the payments are made. The above discussion concerning the taxation of dividends and distributions received by shareholders is applicable whether a shareholder receives such payment in cash or reinvests such amount in additional shares of the Fund.

**Frequent Purchases and Sales of Fund Shares**

The Fund discourages and does not accommodate frequent purchases and sales of fund shares, often referred to as market timing. Market timing is an investment strategy using frequent purchase, redemptions and/or exchanges in an attempt to profit from short-term market movements. Frequent purchases and redemptions of Fund shares may result in dilution of the value of Fund shares held by long-term shareholders, disrupt portfolio management and increase Fund expenses for all shareholders.

The Fund reserves the right to reject any purchase order for any reason, including purchase orders that it does not think are in the best interest of the Fund or its shareholders or if the Fund thinks that trading is abusive. Neither the Fund nor the Advisor will be liable for any losses resulting from rejected purchase or exchange orders. The Advisor may also bar an investor who has violated these policies (and the investor's financial advisor) from opening new accounts with the Fund.

While the Fund attempts to deter market timing, there is no assurance that it will be able to identify and eliminate all market timers. For example, certain accounts called "omnibus accounts" include multiple shareholders. Omnibus accounts typically provide the Fund with a net purchase or redemption request on any given day where purchasers of Fund shares and redeemers of Fund shares are netted against one another and the identity of individual purchasers and redeemers whose orders are aggregated are not known by the Fund. However, the Fund's agreements with financial intermediaries that sell shares of the Fund will require the intermediaries to provide shareholder identity and transaction information to the

Fund, and obligate the intermediaries to carry out the Fund's instructions to enforce the Fund's market timing policies.

**Cybersecurity**

The computer systems, networks and devices used by the Fund and its service providers to carry out routine business operations employ a variety of protections designed to prevent damage or interruption from computer viruses, network failures, computer and telecommunication failures, infiltration by unauthorized persons and security breaches. Despite the various protections utilized by the Fund and its service providers, systems, networks, or devices potentially can be breached. The Fund and its shareholders could be negatively impacted as a result of a cybersecurity breach.

Cybersecurity breaches can include unauthorized access to systems, networks, or devices; infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cybersecurity breaches may cause disruptions and impact the Fund's business operations, potentially resulting in financial losses; interference with the Fund's ability to calculate its NAV; impediments to trading; the inability of the Fund, the Advisor, and other service providers to transact business; violations of applicable privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs; as well as the inadvertent release of confidential information.

Similar adverse consequences could result from cybersecurity breaches affecting issuers of securities in which the Fund invests; counterparties with which the Fund engages in transactions; governmental and other regulatory authorities; exchange and other financial market operators, banks, brokers, dealers, insurance companies, and other financial institutions (including financial intermediaries and service providers for the Fund's shareholders); and other parties. In addition, substantial costs may be incurred by these entities in order to prevent any cybersecurity breaches in the future.

**Financial Highlights**

The financial highlights table is intended to help you understand the Fund's financial performance for the past 5 years. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions). This information has been audited by Sanville & Company, whose report, along with the Fund's financial statements, are included in the Fund's annual report, which is available upon request.

![](finhighlight002.gif)

\* Per share net investment income (loss) has been determined on the basis of average shares outstanding during the year.

\*\* Assumes reinvestment of dividends.

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|  **PRIVACY NOTICE** | **PRIVACY NOTICE** | **PRIVACY NOTICE** | **PRIVACY NOTICE** |
| **FACTS** | **WHAT DOES ADIRONDACK FUNDS DO WITH YOUR PERSONAL** <br> **INFORMATION?** | **WHAT DOES ADIRONDACK FUNDS DO WITH YOUR PERSONAL** <br> **INFORMATION?** | **WHAT DOES ADIRONDACK FUNDS DO WITH YOUR PERSONAL** <br> **INFORMATION?** |
| **Why?** | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| **What?** | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br>- Social Security number - Purchase History<br> - Assets - Account Balances<br> - Retirement Assets - Account Transactions<br> - Transaction History - Wire Transfer Instructions<br> - Checking Account Information<br>When you are *no longer* our customer, we continue to share your information as described in this notice. | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br>- Social Security number - Purchase History<br> - Assets - Account Balances<br> - Retirement Assets - Account Transactions<br> - Transaction History - Wire Transfer Instructions<br> - Checking Account Information<br>When you are *no longer* our customer, we continue to share your information as described in this notice. | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br>- Social Security number - Purchase History<br> - Assets - Account Balances<br> - Retirement Assets - Account Transactions<br> - Transaction History - Wire Transfer Instructions<br> - Checking Account Information<br>When you are *no longer* our customer, we continue to share your information as described in this notice. |
| **How?** | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Adirondack Funds chooses to share; and whether you can limit this sharing. | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Adirondack Funds chooses to share; and whether you can limit this sharing. | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Adirondack Funds chooses to share; and whether you can limit this sharing. |
| **Reasons we can share your personal information** | **Reasons we can share your personal information** | **Does Adirondack Funds share?** | **Can you limit this sharing?** |
| **For our everyday business purposes –**<br> such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | **For our everyday business purposes –**<br> such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| **For our marketing purposes –**<br> to offer our products and services to you | **For our marketing purposes –**<br> to offer our products and services to you | No | We don't share |
| **For joint marketing with other financial companies** | **For joint marketing with other financial companies** | No | We don't share |
| **For our affiliates' everyday business purposes –**<br> information about your transactions and experiences | **For our affiliates' everyday business purposes –**<br> information about your transactions and experiences | No | We don't share |
| **For our affiliates' everyday business purposes –**<br> information about your creditworthiness | **For our affiliates' everyday business purposes –**<br> information about your creditworthiness | No | We don't share |
| **For nonaffiliates to market to you** | **For nonaffiliates to market to you** | No | We don't share |

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| | | |
|:---|:---|:---|
| **Questions?** | Call **(888) 686-2729** | Call **(888) 686-2729** |
| **Who we are** | **Who we are** | **Who we are** |
| **Who is providing this notice?** | **Who is providing this notice?** | Adirondack Funds<br>|
| **What we do** | **What we do** | **What we do** |
| **How does Adirondack Funds protect my personal information?** | **How does Adirondack Funds protect my personal information?** | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.<br>Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information. |
| **How does Adirondack Funds collect my personal information?** | **How does Adirondack Funds collect my personal information?** | We collect your personal information, for example, when you<br> ▪Open an account<br> ▪Provide account information<br> ▪Give us your contact information<br> ▪Make deposits or withdrawals from your account<br> ▪Make a wire transfer<br> ▪Tell us where to send the money<br> ▪Tells us who receives the money<br> ▪Show your government-issued ID<br> ▪Show your driver's license<br> We also collect your personal information from other companies. |
| **Why can't I limit all sharing?** | **Why can't I limit all sharing?** | Federal law gives you the right to limit only<br> **▪** Sharing for affiliates' everyday business purposes – information about your creditworthiness<br> **▪** Affiliates from using your information to market to you<br> **▪** Sharing for nonaffiliates to market to you<br>State laws and individual companies may give you additional rights to limit sharing. |
| **Definitions** | **Definitions** | **Definitions** |
| **Affiliates** | **Affiliates** | Companies related by common ownership or control. They can be financial and nonfinancial companies.<br> ▪ *Adirondack Funds doesn't share with our affiliates.* |
| **Nonaffiliates** | **Nonaffiliates** | Companies not related by common ownership or control. They can be financial and nonfinancial companies<br> ▪*Adirondack Funds doesn't share with nonaffiliates so they can market to you.* |

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|:---|:---|
| **Joint marketing** | A formal agreement between nonaffiliated financial companies that together market financial products or services to you.<br> ▪*Adirondack Funds doesn't jointly market.* |

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**<u>Where to Obtain More Information</u>**

You will find more information about The Adirondack Small Cap Fund, in the following documents:

Statement of Additional Information ("SAI") - The SAI contains more detailed information about the Fund. The SAI dated August 1, 2025 is incorporated herein by reference and is considered to be a part of this prospectus.

Annual and Semi-Annual Reports on Form N-CSR — Our annual and semi-annual reports on Form N-CSR give current holdings and detailed financial statements of the Fund as of the end of the period presented. In addition, market conditions and Fund strategies that affected the Fund's performance are discussed in the annual and semi-annual tailored shareholder reports.

To obtain a copy of one or more of these documents, call the number below or write to the Fund at the following address, and a copy will be sent without charge:

**The Adirondack Small Cap Fund c/o Mutual Shareholder Services, LLC**

**8000 Town Centre Drive, Suite 400**

**Broadview Heights, OH 44147**

**1-888-686-2729**

You may also call or write the Fund to request other information about the Fund or to make shareholder inquiries, or visit the Fund's website at www.adirondackfunds.com.

You may also obtain information about the Fund (including the Statement of Additional Information and other reports) from the Securities and Exchange Commission on their Internet site at **http://www.sec.gov**. You may also obtain Fund information by electronic request at the e-mail address publicinfo@sec.gov.

*Investment Company Act file number 811-21691*

**ADIRONDACK FUNDS**

**STATEMENT OF ADDITIONAL INFORMATION**

Dated August 1, 2025

The Adirondack Small Cap Fund

**Ticker: (ADKSX)**

2390 Western Avenue, Guilderland, NY 12084

1-888-686-2729 toll free

This Statement of Additional Information ("SAI") is not a prospectus, but should be read in conjunction with the Fund's current Prospectus dated August 1, 2025. The Fund's financial statements on [Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/1311981/000116204425000600/adirondackncsr.htm) for the period ended March 31, 2025 is incorporated herein by reference. A free copy of the Prospectus and Annual Report can be obtained without charge by contacting the Transfer Agent, Mutual Shareholder Services, LLC, at 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147 or by calling 1-888-686-2729.

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|:---|:---|
| &nbsp;&nbsp;**TABLE OF CONTENTS** | &nbsp;&nbsp;**TABLE OF CONTENTS** |
| &nbsp;&nbsp;General Information | &nbsp;&nbsp;2 |
| &nbsp;&nbsp;Ethics | &nbsp;&nbsp;2 |
| &nbsp;&nbsp;Proxy Voting | &nbsp;&nbsp;3 |
| &nbsp;&nbsp;Disclosure of Portfolio Holdings | &nbsp;&nbsp;4 |
| &nbsp;&nbsp;Permitted Investments | &nbsp;&nbsp;5 |
| &nbsp;&nbsp;Investment Restrictions | &nbsp;&nbsp;13 |
| &nbsp;&nbsp;Investment Advisor and Other Services | &nbsp;&nbsp;16 |
| &nbsp;&nbsp;Determination of Share Price | &nbsp;&nbsp;19 |
| &nbsp;&nbsp;Additional Tax Information | &nbsp;&nbsp;19 |
| &nbsp;&nbsp;Control Persons and Principal Holders of Securities | &nbsp;&nbsp;20 |
| &nbsp;&nbsp;Management Ownership | &nbsp;&nbsp;21 |
| &nbsp;&nbsp;Trustees and Officers | &nbsp;&nbsp;21 |
| &nbsp;&nbsp;Portfolio Transactions and Brokerage | &nbsp;&nbsp;24 |
| &nbsp;&nbsp;Financial Statements | &nbsp;&nbsp;26 |

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**General Information**

The Adirondack Funds (the "Trust") is an Ohio business trust formed by an Agreement and Declaration of Trust on December 8, 2004. The Trust is an open-end investment company. The Adirondack Small Cap Fund (the "Fund") was organized as a diversified series of the Trust on December 8, 2004, and commenced operations on April 6, 2005. The Fund is advised by Adirondack Research & Management Inc., a registered investment advisor (the "Advisor"), which is controlled by Gregory Roeder (President of the Trust) and Matthew Reiner (Treasurer of the Trust). The Trust Agreement permits the Board of Trustees of the Trust (the "Board") to issue an unlimited number of shares of beneficial interest of separate series without par value. The Fund is the only series currently authorized by the Board.

The Fund does not issue share certificates. All shares are held in non-certificate form registered on the books of the Fund and the Fund's transfer agent for the account of the shareholder. Each share of a series represents an equal proportionate interest in the assets and liabilities belonging to that series with each other share of that series and is entitled to such dividends and distributions out of income belonging to the series as are declared by the Board. The shares do not have cumulative voting rights or any preemptive or conversion rights, and the Board have the authority from time to time to divide or combine the shares of any series into a greater or lesser number of shares of that series so long as the proportionate beneficial interest in the assets belonging to that series and the rights of shares of any other series are in no way affected. In case of any liquidation of a series, the holders of shares of the series being liquidated will be entitled to receive as a class a distribution out of the assets, net of the liabilities, belonging to that series. Expenses attributable to any series are borne by that series. Any general expenses of the Trust not readily identifiable as belonging to a particular series are allocated by or under the direction of the Board in such manner as the Board determines to be fair and equitable. No shareholder is liable to further calls or to assessment by the Trust without his or her express consent.

For information concerning the purchase and redemption of shares of the Fund, see "How to Purchase Shares" and "How to Redeem Shares" in the Prospectus. For a description of the methods used to determine the share price and value of the Fund's assets, see "How Net Asset Value Is Computed" in the Prospectus and "Determination of Share Price" in this Statement of Additional Information.

**Ethics**

Pursuant to the requirements of rule 17j-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), and in order to protect against certain unlawful acts, practices and courses of business by certain individuals or entities related to the Trust or the Advisor, both the Fund and the Advisor have adopted a Code of Ethics (the "Code") and procedures for implementing the provisions of the Code. The personnel of the Trust and the Advisor are subject to the Code when investing in securities that may be purchased, sold or held by the Fund. With respect to the Advisor, the Code may also be governed by provisions of the Investment Advisers Act of 1940.

**Proxy Voting**

The Board has delegated responsibilities for decisions regarding proxy voting for securities held by the Fund to the Advisor. The Advisor will vote such proxies in accordance with its proxy policies and procedures, which are essentially the same as the Fund's. In some instances, the Advisor may be asked to cast a proxy vote that presents a conflict between the interests of the Fund's shareholders, and those of the Advisor or an affiliated person of the Advisor. In such a case, the Trust's policy requires that the Advisor abstain from making a voting decision and to forward all necessary proxy voting materials to the Trust to enable the Board to make a voting decision. When the Board is required to make a proxy voting decision, only the Board members without a conflict of interest with regard to the security in question or the matter to be voted upon shall be permitted to participate in the decision of how the Fund's vote will be cast. The Advisor has developed a detailed proxy voting policy that has been approved by the Board.

The Advisor's policies and procedures state that the Advisor generally relies on the individual portfolio manager(s) to make the final decision on how to cast proxy votes. When exercising its voting responsibilities, the Advisor's policies call for an emphasis on (i) accountability of management of the company to its board, and of the board to the company's shareholders, (ii) alignment of management and shareholder interests and (iii) transparency through timely disclosure of important information about a company's operations and financial performance. While no set of proxy voting guidelines can anticipate all situations that may arise, the Advisor has adopted guidelines describing the Advisor's general philosophy when proposals involve certain matters. The following is a summary of those guidelines:

* electing a board of directors – a
board should be composed primarily of independent directors, and key board committees should be entirely independent. The Advisor generally
supports efforts to declassify boards or other measures that permit shareholders to remove a majority of directors at any time;

* approving independent auditors – the
relationship between a company and its auditors should be limited primarily to the audit engagement;

* providing equity-based compensation plans
- appropriately designed equity-based compensation plans, approved by shareholders, can be an effective way to align the interests of
shareholders and the interests of directors, management, and employees by providing incentives to increase shareholder value. Conversely,
the Advisor is opposed to plans that substantially dilute ownership interests in the company, provide participants with excessive awards,
or have inherently objectionable structural features;

* corporate voting structure - shareholders
should have voting power equal to their equity interest in the company and should be able to approve or reject changes to a company's
by-laws by a simple majority vote. The Advisor opposes super-majority requirements and generally supports the ability of shareholders
to cumulate their votes for the election of directors; and

* shareholder rights plans - shareholder rights plans, also known as poison pills, may
tend to entrench current management, which the Advisor generally considers to have a negative impact on shareholder value.

The actual voting records relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request by calling toll free, 1-888-686-2729 or by accessing the Securities and Exchange Commission's (the "SEC") website at www.sec.gov. In addition, a copy of the Fund's/Advisor's proxy voting policies and procedures are also available by calling 1-888-686-2729 and will be sent within three business days of receipt of a request.

**Disclosure of Portfolio Holdings**

It is a policy of the Fund and a fiduciary duty of the Advisor not to disclose intentions to purchase or sell securities to anyone other than the broker-dealer commissioned to execute the trade. Furthermore, the Advisor will not disclose details of positions owned by the Fund in an effort to encourage market-timing or otherwise treat shareholders preferentially. The Fund is required to include a schedule of portfolio holdings in its Annual and Semi-Annual Financial Statements on Form N-CSR, which is filed with the SEC on Form N-CSR within 70 days of the end of the second and fourth fiscal quarters. The Fund also is required to file a schedule of portfolio holdings with the SEC on Form N-PORT within 60 days of the end of each quarter. The Fund must provide a copy of the complete schedule of portfolio holdings as filed with the SEC to any shareholder of the Fund, upon request, free of charge. This policy is applied uniformly to all shareholders of the Fund without regard to the type of requesting shareholder (i.e., regardless of whether the shareholder is an individual or institutional investor). Information contained in Form N-CSR, as well as information filed with the SEC on Form N-PORT and information posted on the Fund's website, is public information. All other information is non-public information.

The Fund has an ongoing relationship with third party servicing agents to release portfolio holdings information on a daily basis in order for those parties to perform their duties on behalf of the Fund. These third-party servicing agents are the Advisor, transfer agent, Fund accounting agent and custodian. The Fund also may disclose portfolio holdings, as needed, to auditors, legal counsel, proxy voting services (if applicable), pricing services, printers, parties to merger and reorganization agreements and their agents, and prospective or newly hired investment advisers or sub-advisers. The lag between the date of the information and the date on which the information is disclosed will vary based on the identity of the party to whom the information is disclosed. For instance, the information may be provided to auditors within days of the end of an annual period, while the information may be given to legal counsel or prospective sub-advisers at any time. The Fund's chief compliance officer must authorize all disclosures of portfolio holdings. This information is disclosed to all such third parties under conditions of confidentiality. "Conditions of confidentiality" include (i) confidentiality clauses in written agreements, (ii) confidentiality implied by the nature of the relationship (e.g., attorney-client relationship), (iii) confidentiality required by fiduciary or regulatory principles (e.g., custody relationships) or (iv) understandings or expectations between the parties that the information will be kept confidential. The Fund believes, based upon its expected size and operations, that these

are reasonable procedures to protect the confidentiality of the Fund's portfolio holdings and will provide sufficient protection against personal trading based on the information.

Except as described above, the Fund is prohibited from entering into any arrangements with any person to make available information about the Fund's portfolio holdings without the specific approval of the Board. The Advisor must submit any proposed arrangement pursuant to which the Advisor intends to disclose the Fund's portfolio holdings to the Board, which will review such arrangement to determine (i) whether it is in the best interests of Fund shareholders, (ii) whether the information will be kept confidential and (iii) whether the disclosure presents a conflict of interest between the interests of Fund shareholders and those of the Advisor, or any affiliated person of the Fund, or the Advisor. Additionally, the Fund, the Advisor, and any affiliated persons of the Fund or Advisor, are prohibited from receiving compensation or other consideration, for themselves or on behalf of the Fund, as a result of disclosing the Fund's portfolio holdings.

**Permitted Investments**

All principal investment strategies and risks are discussed in the Prospectus. Additional information regarding principal and non-principal strategies and risks are discussed here.

<u>Principal Investment Strategies and Risks</u>

<u>FOREIGN SECURITIES</u> are considered only if they are trading in domestic markets through the American Depositary Receipts ("ADRs"). An ADR is a receipt for the shares of a foreign-based corporation, held in the vault of a U.S. bank and entitling the shareholder to all dividends and capital gains. A company issues a sponsored ADR whose stock will underlie the ADR. The corporation provides financial information to the bank and may subsidize the administration of the ADRs. An unsponsored ADR is issued by a broker/dealer or a depositary bank without the involvement of the company whose stock underlies the ADR. Purchases of foreign equity securities entail certain risks. For example, there may be less information publicly available about a foreign company then about a U.S. company, and foreign companies are not generally subject to accounting, auditing and financial reporting standards and practices comparable to those in the U.S. Other risks associated with investments in foreign securities include changes in restrictions on foreign currency transactions and rates of exchanges, changes in the administrations or economic and monetary policies of foreign governments, the imposition of exchange control regulations, the possibility of expropriation decrees and other adverse foreign governmental action, the imposition of foreign taxes, less liquid markets, less government supervision of exchanges, brokers and issuers, difficulty in enforcing contractual obligations, delays in settlement of securities transactions and greater price volatility. Unsponsored ADRs may carry more risk than sponsored ADRs because of the absence of financial information provided by the underlying company. In addition, investing in foreign securities will generally result in higher commissions than investing in similar domestic securities. In addition to traditional foreign issuers, the Fund invests in securities of foreign domiciled companies which trade on U.S. exchanges, follow U.S. Generally Accepted Accounting Principles ("GAAP") or International Financial Reporting Standards ("IFRS") and comply with U.S. securities laws. The Fund does not consider such securities to be foreign securities.

<u>Non-Principal Investment Strategies and Risks</u>

<u>CORPORATE DEBT SECURITIES</u> are long and short-term debt obligations issued by companies (such as publicly issued and privately placed bonds, notes and commercial paper). The Fund may invest in corporate debt securities which are trading at a discount or the Advisor feels are undervalued and offer the opportunity for price appreciation. The Advisor considers corporate debt securities to be of investment grade quality if they are rated BBB or higher by S&P or Baa or higher by Moody's, or if unrated, determined by the Advisor to be of comparable quality. Investment grade debt securities generally have adequate to strong protection of principal and interest payments. In the lower end of this category, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal than in higher rated categories. The Fund may invest in both secured and unsecured corporate bonds. A secured bond is backed by collateral and an unsecured bond is not. Therefore, an unsecured bond may have a lower recovery value than a secured bond in the event of a default by its issuer. The Advisor may incorrectly analyze the risks inherent in corporate bonds, such as the issuer's ability to meet interest and principal payments, resulting in a loss to the Fund.

The Fund may also purchase lower quality debt securities, or unrated debt securities, that have poor protection of payment of principal and interest. These securities, commonly referred to as "junk bonds," often are considered to be speculative and involve greater risk of default and of price changes due to changes in the issuer's creditworthiness. Market prices of these securities may fluctuate more than higher quality debt securities and may decline significantly in periods of general economic difficulty that may follow periods of rising rates. While the market for junk bonds has been in existence for many years and has weathered previous economic downturns, the market in recent years has experienced a dramatic increase in the large-scale use of such securities to fund highly leveraged corporate acquisitions and restructurings. Accordingly, past experience may not provide an accurate indication of future performance of the junk bond market, especially during periods of economic recession. The Fund may invest in securities which are of lower quality or are unrated if the Advisor determines that the securities provide the opportunity of meeting the Fund's objective without presenting excessive risk. The Advisor will consider all factors, which it deems appropriate, including ratings, in making investment decisions for the Fund and will attempt to minimize investment risks through diversification, investment analysis and monitoring of general economic conditions and trends. To the extent that the Fund invests in lower quality securities, achievement of its investment objective may be more dependent on the Advisor's credit analyses than is the case for higher quality bonds. While the Advisor may refer to ratings, it does not rely exclusively on ratings, but makes its own independent and ongoing review of credit quality.

The market for lower quality securities may be thinner and less active than that for higher quality securities, which can adversely affect the prices at which these securities can be sold. If there is not an established retail secondary market and market quotations are not available, these securities are valued in accordance with procedures established by the Board, including the use of outside pricing services. Judgment plays a greater role in valuing junk bonds than is the case for securities for which external sources for quotations and last-sale information are available. Adverse publicity and changing investor perceptions may affect the ability of outside pricing

services used by the Fund to value these securities, and the Fund's ability to dispose of these lower quality debt securities.

Lower quality securities present risks based on payment expectations. For example, junk bonds may contain redemption or call provisions. If an issuer exercises the provisions in a declining interest rate market, the Fund would have to replace the security with a lower yielding security, resulting in a decreased return for investors. Conversely, a junk bond's value will decrease in a rising interest rate market, as will the value of the Fund's assets. If the Fund experiences unexpected net redemptions, this may force it to sell its junk bonds, without regard to their investment merits, thereby decreasing the asset base upon which the Fund's expenses can be spread and possibly reducing the Fund's rate of return.

Since the risk of default is higher for lower quality securities and sometimes increases with the age of these securities, the Advisor's research and credit analysis are an integral part of managing any securities of this type held by the Fund. In considering investments for the Fund, the Advisor attempts to identify those issuers of high-yielding securities whose financial condition is adequate to meet future obligations, has improved or is expected to improve in the future. The Advisor's analysis focuses on relative values based on such factors as interest or dividend coverage, asset coverage, earning prospects, and the experience and managerial strength of the issuer.

<u>WARRANTS</u> are securities that are usually issued with a bond or preferred stock but may trade separately in the market. A warrant allows its holder to purchase a specified amount of common stock at a specified price for a specified time. The risk in investing in warrants is the Advisor might miscalculate their value, resulting in a loss to the Fund. Another risk is the warrants will not realize their value because the underlying common stock does reach the Advisor's anticipated price within the life of the warrant.

<u>RIGHTS</u> are usually granted to existing shareholders of a corporation to subscribe to shares of a new issue of common stock before it is issued to the public. The right entitles its holder to buy common stock at a specified price. Rights have similar features to warrants, except that the life of a right is typically much shorter, usually a few weeks. The Advisor believes rights may become underpriced if they are sold without regard to value and if analysts do not include them in their research. The risk in investing in rights is the Advisor might miscalculate their value resulting in a loss to the Fund. Another risk is the underlying common stock may not reach the Advisor's anticipated price within the life of the right.

<u>PREFERRED STOCKS</u> are securities that have characteristics of both common stocks and corporate bonds. Preferred stocks may receive dividends but payment is not guaranteed as with a bond. These securities may be undervalued because of a lack of analyst coverage resulting in a high dividend yield or yield to maturity. The risks of preferred stocks are a lack of voting rights and the Advisor may incorrectly analyze the security, resulting in a loss to the Fund. Furthermore, preferred stock dividends are not guaranteed and management can elect to forego the preferred dividend, resulting in a loss to the Fund.

<u>INVESTMENT COMPANY SECURITIES</u> are shares of other mutual funds. Due to adverse market, economic, political or other conditions; to maintain liquidity; or pending selection of

investments, the Fund may temporarily invest in investment companies with investment objectives and principal investment strategies similar to those of the Fund. This includes purchasing shares of other investment companies that invest in small cap companies, investing in exchange traded funds that track small cap indices or investing in sector-based investment companies to gain exposure to certain segments of the market that the Advisor has determined may be undervalued and offer the opportunity for capital appreciation. Investments in other investment companies must be in accordance with the Fund's investment policies.

The Fund may invest in securities issued by other investment companies. The Fund intends to limit its investments in accordance with applicable law or as permitted by Rule 12d1-4. Among other things, such law would limit these investments so that, as determined immediately after a securities purchase is made by the Fund: (a) not more than 5% of the value of its total assets will be invested in the securities of any one investment company; (b) not more than 10% of the value of its total assets will be invested in the aggregate in securities of investment companies as a group; (c) not more than 3% of the outstanding voting stock of any one investment company will be owned by the Fund; and (d) not more than 10% of the outstanding voting stock of any one closed-end investment company will be owned by the Fund together with all other investment companies that have the same advisor. Under certain sets of conditions, different sets of restrictions may be applicable. As a shareholder of another investment company, the Fund would bear, along with other shareholders, its proportionate share of that investment company's expenses, including advisory fees. These expenses would be in addition to the advisory and other expenses that the Fund bears directly in connection with its own operations. Investment companies in which the Fund may invest may also impose a sales or distribution charge in connection with the purchase or redemption of their shares and other types of commissions or charges. Such charges will be payable by the Fund and, therefore, will be borne directly by the Fund's shareholders.

To the extent applicable, the Fund intends to rely on Section 12(d)(1)(F) and Rule 12d1-4 under the 1940 Act which in conjunction with one another allow registered investment companies (such as the Fund) to exceed the limitations set forth above, provided the aggregate sales loads any investor pays (i.e., the combined distribution expenses of both the acquiring fund and the acquired funds) do not exceed the limits on sales loads established by Financial Industry Regulatory Authority ("FINRA") for funds of funds, and the registered investment company "mirror votes" any securities purchased pursuant to Section 12(d)(1)(F).

Because other investment companies employ an investment advisor and incur fees and expenses, such investments by the Fund will cause the Fund, and indirectly the Fund's shareholders, to bear duplicate fees.

<u>FUTURES CONTRACTS</u> provide for the future sale by one party and purchase by another party of a specified amount of a specific security, class of securities, or an index at a specified future time and at a specified price. Futures contracts may be issued with respect to fixed-income securities, foreign currencies, single stocks or financial indices, including indices of U.S. government securities, foreign government securities, and equity or fixed-income securities. U.S. futures contracts are traded on exchanges that have been designated "contract markets" by the Commodity Futures Trading Commission (the "CFTC") and must be executed through a futures commission merchant ("FCM"), or brokerage firm, which is a member of the relevant

contract market. Through their clearing corporations, the exchanges guarantee performance of the contracts between the clearing members of the exchange. The Fund only invests in futures contracts to the extent it could invest in the underlying instrument directly.

The Fund will engage in futures transactions for hedging purposes only. This means that the Fund's primary purpose in entering into futures contracts is to protect the Fund from fluctuations in the value of securities or interest rates without actually buying or selling the underlying debt or equity security. For example, if the Fund anticipates an increase in the price of stocks, and it intends to purchase stocks at a later time, the Fund could enter into a futures contract to purchase a stock index as a temporary substitute for stock purchases. If an increase in the market occurs that influences the stock index as anticipated, the value of the futures contracts will increase, thereby serving as a hedge against the Fund not participating in a market advance. This technique is sometimes known as an anticipatory hedge. Conversely, if the Fund holds stocks and seeks to protect itself from a decrease in stock prices, the Fund might sell stock index futures contracts, thereby hoping to offset the potential decline in the value of its portfolio securities by a corresponding increase in the value of the futures contract position. The Fund could protect against a decline in stock prices by selling portfolio securities and investing in money market instruments, but the use of futures contracts enables it to maintain a defensive position without having to sell portfolio securities.

If the Fund owns Treasury bonds and the portfolio manager expects interest rates to increase, the Fund may take a short position in interest rate futures contracts. Taking such a position would have much the same effect as the Fund selling Treasury bonds in its portfolio. If interest rates increase as anticipated, the value of the Treasury bonds would decline, but the value of the Fund's interest rate futures contract will increase, thereby keeping the net asset value of the Fund from declining as much as it may have otherwise. If, on the other hand, a portfolio manager expects interest rates to decline, the Fund may take a long position in interest rate futures contracts in anticipation of later closing out the futures position and purchasing the bonds. Although the Fund can accomplish similar results by buying securities with long maturities and selling securities with short maturities, given the greater liquidity of the futures market than the cash market, it may be possible to accomplish the same result more easily and more quickly by using futures contracts as an investment tool to reduce risk.

Risk Factors in Futures Transactions

· Liquidity Risk. Because futures contracts are generally settled within a day from the date they are closed
out, compared with a settlement period of one day for most types of securities, the futures markets can provide similar liquidity to the
securities markets. Nevertheless, there is no assurance that a liquid secondary market will exist for any particular futures contract
at any particular time. In addition, futures exchanges may establish daily price fluctuation limits for futures contracts and may halt
trading if a contract's price moves upward or downward more than the limit in a given day. On volatile trading days when the price
fluctuation limit is reached, it may be impossible for the Fund to enter into new positions or close out existing positions. If the secondary
market for a futures contract is not liquid because of price fluctuation limits or otherwise, the Fund may not be able to promptly liquidate
unfavorable futures positions and potentially could be required to continue to hold a futures position until the delivery
date, regardless of changes in its value. As a result, the Fund's access to other assets held to cover its futures positions also
could be impaired.

· Risk of Loss. Although the Fund believes that the use of such contracts will benefit the Fund, the Fund's
overall performance could be worse than if the Fund had not entered into futures contracts if the Advisor's investment judgment
proves incorrect. For example, if the Fund has hedged against the effects of a possible decrease in prices of securities held in its portfolio
and prices increase instead, the Fund will lose part or all of the benefit of the increased value of these securities because of offsetting
losses in its futures positions. In addition, if the Fund has insufficient cash, it may have to sell securities from its portfolio to
meet daily variation margin requirements. Those sales may be, but will not necessarily be, at increased prices that reflect the rising
market and may occur at a time when the sales are disadvantageous to the Fund.

The risk of loss in trading futures contracts in some strategies can be substantial, due both to the low margin deposits required, and the extremely high degree of leverage involved in futures pricing. Because the deposit requirements in the futures markets are less onerous than margin requirements in the securities market, there may be increased participation by speculators in the futures market that may also cause temporary price distortions. A relatively small price movement in a futures contract may result in immediate and substantial loss (as well as gain) to the investor. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount invested in the contract. The Fund will only engage in futures transactions when it is believed these risks are justified and will engage in futures transactions primarily for risk management purposes.

· Correlation Risk. The prices of futures contracts depend primarily on the value of their underlying instruments.
Because there are a limited number of types of futures contracts, it is possible that the standardized futures contracts available to
the Fund will not match exactly the Fund's current or potential investments. The Fund may buy and sell futures contracts based on
underlying instruments with different characteristics from the securities in which it typically invests--for example, by hedging investments
in portfolio securities with a futures contract based on a broad index of securities--which involves a risk that the futures position
will not correlate precisely with the performance of the Fund's investments.

Futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments closely correlate with the Fund's investments. Futures prices are affected by factors such as current and anticipated short-term interest rates, changes in volatility of the underlying instruments and the time remaining until expiration of the contract. Those factors may affect securities prices differently from futures prices. Imperfect correlations between the Fund's investments and its futures positions also may result from differing levels of demand in the futures markets and the securities markets, from structural differences in how futures and securities are traded, and from imposition of daily price fluctuation limits for futures contracts. The Fund may buy or sell futures contracts with a greater or lesser value than the securities it wishes to hedge or is considering purchasing in order to attempt to compensate for differences in

historical volatility between the futures contract and the securities, although this may not be successful in all cases. If price changes in the Fund's futures positions are poorly correlated with its other investments, its futures positions may fail to produce desired gains or result in losses that are not offset by the gains in the Fund's other investments.

Regulation as a Commodity Pool Operator

The Advisor, with respect to the Fund, has filed with the National Futures Association a notice claiming an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act, as amended, and Rule 4.5 of the Commodity Futures Trading Commission promulgated thereunder. Accordingly, neither the Fund nor the Advisor is subject to registration or regulation as a commodity pool operator.

Margin Requirements

The buyer or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the buyer and seller are required to deposit "initial margin" for the benefit of the FCM when the contract is entered into. Initial margin deposits:

· Are equal to a percentage of the contract's value, as set by the exchange on which the contract
is traded;

· May be maintained in cash or certain other liquid assets by the Fund's custodian for the benefit
of the FCM; and

· Are similar to good faith deposits or performance bonds.

Unlike margin extended by a securities broker, initial margin payments do not constitute purchasing securities on margin for purposes of the Fund's investment limitations. If the value of either party's position declines, that party will be required to make additional "variation margin" payments for the benefit of the FCM to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. In the event of the bankruptcy of the FCM that holds margin on behalf of the Fund, the Fund may be entitled to return of margin owed to the Fund only in proportion to the amount received by the FCM's other customers. The Trust will attempt to minimize this risk by careful monitoring of the creditworthiness of the FCMs with which it does business and by depositing margin payments in a segregated account with the Fund's custodian.

Liquidity Impact of Margin Requirements

Although the Fund will maintain cash and liquid assets in an amount sufficient to cover its open futures obligations, those assets will be available to the Fund immediately upon closing out the futures position, while settlement of securities transactions could take one or more days. However, because the Fund's cash that may otherwise be invested would be held uninvested or invested in other liquid assets so long as the futures position remains open, the Fund's return could be diminished due to the opportunity losses of foregoing other potential investments.

illiquid or Restricted INVESTMENTS The Fund may invest up to 15% of its net assets in investments that are considered illiquid. Illiquid investments may trade at a discount to comparable, more liquid investments and thereby restrict the ability of the Fund to dispose of its investments for a fair price in a timely fashion. An investment will be deemed illiquid if the Fund reasonably expects it cannot be sold or disposed of in current market conditions in 7 calendar days or less without the sale or disposition significantly changing the market value of the investment. Illiquid investments pose more risk to Fund shareholders and therefore must be monitored closely by the Advisor.

Real Estate Investment Trusts The Fund may invest up to 10% of its assets in the securities of real estate investment trusts ("REITs"). REITs are corporations or business trusts that invest substantially all of their assets in interests in real estate. REITs offer investors greater liquidity and diversification than direct ownership of properties. In making investment decisions regarding the purchase of REITs, the Advisor uses a similar investment analysis process as is used in the selection of individual securities, namely selecting undervalued securities using key valuation metrics and then performing a detailed assessment of the REIT's management, strategy, financial statements and competition. Equity REITs are those which purchase or lease land and buildings and generate income primarily from rental income. Equity REITs may also realize capital gains (or losses) when selling property that has appreciated (or depreciated) in value. Mortgage REITs are those that invest in real estate mortgages and generate income primarily from interest payments on mortgage loans. Hybrid REITs generally invest in both real property and mortgages. Unlike corporations, REITs do not pay income taxes if they meet certain IRS requirements. Real estate related equity securities also include those insured by real estate developers, companies with substantial real estate holdings (for investment or as part of their operations), as well as companies whose products and services are directly related to the real estate industry, such as building supply manufacturers, mortgage lenders or mortgage servicing companies. Like any investment in real estate, though, a REIT's performance depends on several factors, such as its ability to find tenants, renew leases and finance property purchases and renovations. Other risks associated with REIT investments include the fact that equity and mortgage REITs are dependent upon specialized management skills and are not fully diversified. These characteristics subject REITs to the risks associated with financing a limited number of projects. They are also subject to heavy cash flow dependency, defaults by borrowers, and self-liquidation. Additionally, equity REITs may be affected by any changes in the value of the underlying property owned by the trusts, and mortgage REITs may be affected by the quality of any credit extended. Because REITs employ an investment advisor and incur fees and expenses, such investments by the Fund will cause the Fund, and indirectly the Fund's shareholders, to bear duplicate fees.

<u>SHORT SALES</u> The Fund may sell a security short in anticipation of a decline in the market value of the security. The Fund will sell a security short for investment purposes when the Advisor determines that the security is overvalued and anticipates a correction in the market price. The Advisor may also sell securities short as a hedge against losses in the value of securities held by the Fund. When a Fund engages in a short sale, it sells a security that it does not own. To complete the transaction, the Fund must borrow the security in order to deliver it to the buyer. The Fund must replace the borrowed security by purchasing it at the market price at the time of replacement, which may be more or less than the price at which the Fund sold the security. The Fund will incur a loss as a result of the short sale if the price of the security

increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will realize a profit if the security declines in price between those dates. Any potential gain is limited to the price at which the Fund sold the security short, and any potential loss is unlimited in size. The Fund will limit its investments in short sales to 15% of its total assets.

In connection with its short sales, the Fund will be required to maintain a segregated account with the Fund's custodian of cash or high-grade liquid assets equal to (i) the greater of the current market value of the securities sold short or the market value of such securities at the time they were sold short, less (ii) any collateral deposited with its broker (not including the proceeds from the short sales). Depending on arrangements made with the broker or custodian, the Fund may not receive any payments (including interest) on collateral deposited with the broker or custodian.

**Investment Restrictions**

For the benefit of shareholders, the Fund has adopted the following restrictions, which are fundamental policies and cannot be changed without the approval of a majority of the Fund's outstanding voting securities.

As used in this Statement of Additional Information as to any matter requiring shareholder approval, the phrase "majority of the outstanding securities" means the vote at a meeting of (i) 67% or more of the shares present or represented, if the holders of more than 50% of the outstanding voting securities are present in person or represented by proxy, or (ii) more than 50% of the outstanding voting securities, whichever is less.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Borrowing Money</u>. The Fund will not borrow money, except: (a) from a bank, provided that immediately after such borrowing there is an asset coverage of 300% for all borrowings of the Fund; or (b) from a bank or other persons for temporary purposes only, provided that such temporary borrowings are in an amount not exceeding 5% of the Fund's total assets at the time when the borrowing is made. This limitation does not preclude the Fund from entering into reverse repurchase transactions, provided that the Fund has an asset coverage of 300% for all borrowings and repurchase commitments of the Fund pursuant to reverse repurchase transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Senior Securities</u>. The Fund will not issue senior securities. This limitation is not applicable to activities that may be deemed to involve the issuance or sale of a senior security by the Fund, provided that the Fund's engagement in such activities is consistent with or permitted by the 1940 Act, the rules and regulations promulgated thereunder or interpretations of the SEC or its staff. Section 18(f) of the 1940 Act generally prohibits a fund from issuing any senior security, except that a fund may borrow from a bank if the fund has asset coverage of at least 300%. The SEC has described certain types of fund portfolio transactions that it believes involve leverage and, therefore, could be deemed to create senior securities. The SEC has stated, however, that a senior security will not be created if a fund either "covers" its obligations under these portfolio transactions by either owning or having the right to obtain the security underlying the transaction, or by maintaining a segregated asset account on the books of its custodian containing liquid assets equal in value to the fund's potential exposure to the leveraged transaction.

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Underwriting</u>. The Fund will not act as underwriter of securities issued by other persons. This limitation is not applicable to the extent that, in connection with the disposition of portfolio securities (including restricted securities), the Fund may be deemed an underwriter under certain federal securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Real Estate</u>. The Fund will not purchase or sell real estate. This limitation is not applicable to investments in marketable securities that are secured by or represent interests in real estate. This limitation does not preclude the Fund from investing in mortgage-related securities or investing in companies engaged in the real estate business or that have a significant portion of their assets in real estate (including real estate investment trusts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Commodities</u>. The Fund will not purchase or sell commodities unless acquired as a result of ownership of securities or other investments. This limitation does not preclude the Fund from purchasing or selling options or futures contracts, from investing in securities or other instruments backed by commodities or from investing in companies, which are engaged in a commodities business or have a significant portion of their assets in commodities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Loans</u>. The Fund will not make loans to other persons, except: (a) by loaning portfolio securities; (b) by engaging in repurchase agreements; or (c) by purchasing non-publicly offered debt securities. For purposes of this limitation, the term "loans" shall not include the purchase of a portion of an issue of publicly distributed bonds, debentures or other securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Concentration</u>. The Fund will not invest 25% or more of its total assets in a particular industry or group of industries. The Fund will not invest 25% or more of its total assets in any investment company that concentrates. This limitation is not applicable to investments in obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities or repurchase agreements with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Diversification</u>. The Fund will invest in the securities of any issuer only if, immediately after such investment, at least 75% of the value of the total assets of the Fund will be invested in cash and cash items (including receivables), U.S. government securities, securities of other investment companies or other securities for the purposes of this calculation limited in respect of any one issuer to an amount (determined immediately after the latest acquisition of securities of the issuer) not greater in value than 5% of the value of the total assets of the Fund and to not more than 10% of the outstanding voting securities of such issuer.

With respect to the percentages adopted by the Trust as maximum limitations on its investment policies and limitations, an excess above the fixed percentage will not be a violation of the policy or limitation unless the excess results immediately and directly from the acquisition of any security or the action taken. This paragraph does not apply to the borrowing policy set forth in paragraphs 1 and 2 above. In the event the Fund's illiquid holdings exceed 15% of its net assets, the Advisor is required to notify the Board within one business day with an explanation of the extent and causes of the event, and a plan for how the Fund will be brought back into compliance with the 15% limit within a reasonable time period. If the 15% limit remains exceeded for 30 days, the Board, including a majority of its members who are not interested persons, must assess whether the plan presented to it by the Advisor continues to be in the best interest of the Fund.

Notwithstanding any of the foregoing limitations, any investment company, whether organized as a trust, association or corporation, or a personal holding company, may be merged or consolidated with or acquired by the Trust with shareholder approval, provided that if such merger, consolidation or acquisition results in an investment in the securities of any issuer prohibited by said paragraphs, the Trust shall, within such reasonable time after the consummation of such merger, consolidation or acquisition as is necessary to preserve the tax-free nature of the transaction, dispose of all of the securities of such issuer so acquired or such portion thereof as shall bring the total investment therein within the limitations imposed by said paragraphs above.

The Fund has adopted the following restrictions, which are non-fundamental policies and can be changed without the approval of shareholders. The Fund may not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Pledging</u>. The Fund will not mortgage, pledge, hypothecate or in any manner transfer, as security for indebtedness, any assets of the Fund except as may be necessary in connection with borrowings described in limitation (1) above. The Fund will not mortgage, pledge or hypothecate more than 1/3 of its assets as collateral for such borrowing, and immediately after such borrowing the Fund shall maintain asset coverage of 300% of all borrowing. Margin deposits, security interests, liens and collateral arrangements with respect to transactions involving options, futures contracts, short sales and other permitted investments and techniques are not deemed to be a mortgage, pledge or hypothecation of assets for purposes of this limitation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Borrowing</u>. The Fund will not purchase any security while borrowings (including reverse repurchase agreements) representing more than 5% of its total assets are outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Margin Purchases</u>. The Fund will not purchase securities or evidences of interest thereon on "margin." This limitation is not applicable to short-term credit obtained by the Fund for the clearance of purchases and sales or redemption of securities, or to arrangements with respect to transactions involving futures contracts, and other permitted investments and techniques.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Options</u>. The Fund will not purchase or sell puts, calls, options or straddles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Illiquid Investments</u>. The Fund will not invest more than 15% of its net assets in securities it reasonably expects cannot be sold or disposed of in current market conditions in 7 calendar days or less without the sale or disposition significantly changing the market value of the investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>80% Investment Policy</u>. The Fund has adopted a policy to invest, under normal circumstances, at least 80% of its assets (defined as net assets plus the amount of any borrowing for investment purposes) in common stocks of small capitalization companies (defined as issuers that, at the time of initial purchase, have a market capitalization below $7 billion). If the Fund no longer meets the 80% investment requirement, additional investments will be made in a manner that will bring the Fund into compliance. Shareholders of the Fund will be provided with at least 60 days' prior notice of any change in the Fund's policy. The notice will be provided in plain English in a separate written document containing the following, or similar clear and understandable, statement in boldface type: "Important Notice Regarding Change in Investment Policy [and Name]". The statement will also appear on the envelope in which the

notice is delivered. If the notice is provided electronically, the statement also will appear on the subject line of the email communication that includes the notice or an equivalent indication of the subject of the communication in other forms of electronic media. The notice will describe, as applicable, the Fund's investment policy, set forth above, the nature of the change to the policy, the Fund's old and new names, and the effective date of any policy and/or name changes. The Advisor, subject to the approval of the Board, may change the definition of small capitalization companies. Shareholders will be notified of any such change.

**Investment Advisor and Other Services**

Investment Advisor

Adirondack Research & Management Inc., 2390 Western Avenue, Guilderland, NY 12084 acts as the investment advisor to the Fund. The Advisor provides to the Fund such investment advice as the Board deems advisable and furnishes a continuous investment program for the Fund consistent with the Fund's investment objective and policies. The Advisor determines the securities to be purchased for the Fund, the portfolio securities to be held or sold by the Fund and the portion of the Fund's assets to be held uninvested, subject always to the Fund's investment objective, policies and restrictions, as each of the same shall be from time to time in effect, and subject further to such policies and instructions as the Board may from time to time establish. The annual fee accrues daily and is deducted from the daily average net assets of the Fund.

The Advisor retains the right to use the name "Adirondack" in connection with another investment company or business enterprise with which the Advisor is or may become associated. The Trust's right to use the name "Adirondack" automatically ceases ninety days after termination of the Agreement and may be withdrawn by the Advisor on ninety days written notice.

The Advisor (from its own resources) may make payments to banks or other financial institutions that provide shareholder services and administer shareholder accounts. If a bank or other financial institution were prohibited from continuing to perform all or a part of such services, management of the Fund believes that there would be no material impact on the Fund or its shareholders. Banks may charge their customers fees for offering these services to the extent permitted by applicable regulatory authorities, and the overall return to those shareholders availing themselves of the bank services will be lower than to those shareholders who do not. The Fund may from time to time purchase securities issued by banks that provide such services; however, in selecting investments for the Fund, no preference will be shown for such securities.

The Advisor is entitled to receive an annual advisory fee of 1.08% of the Fund's average daily net assets. The Advisor has contractually agreed to waive its management fees and/or reimburse expenses to the extent necessary to maintain the Fund's total annual operating expenses at 1.48%. This waiver and reimbursement, should it be needed, will remain in place until August 1, 2026. The Advisor's obligation to reimburse expenses excludes brokerage costs, borrowing costs (such as interest and dividends on securities sold short), taxes, extraordinary expenses, and costs of acquired funds.

Each deferral or reimbursement by the Advisor is subject to repayment by the Fund within three years after the waived or reimbursed expenses occurred, if the Fund is able to make the repayment without exceeding the lesser of its current expense limitation or the expense limitation in effect at the time of the reduction, and the repayment is approved by the Board.

For the fiscal years ended March 31, 2023, March 31, 2024, and March 31, 2025, the Advisor earned management fees of $382,621, $369,026 and $413,352, respectively. For the fiscal year ended March 31, 2025, the Advisor waived $19,643 in management fees.

The Portfolio Managers

Mr. Matthew P. Reiner and Mr. Gregory Roeder (the "Portfolio Managers") are responsible for the day-to-day management of the Fund. As owners of the Advisor, Mr. Reiner and Mr. Roeder will receive a share of any profits realized by the Advisor. This could be in the form of a salary or profit distributions. As of March 31, 2025, Mr. Reiner and Mr. Roeder were both responsible for the management of the following types of accounts in addition to the Fund:

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**Account Type** | &nbsp;&nbsp;**Number of Accounts by Account Type** | &nbsp;&nbsp;**Total Assets By Account Type** | &nbsp;&nbsp;**Number of Accounts by Type Subject to a Performance Fee** | &nbsp;&nbsp;**Total Assets By Account Type Subject to a Performance Fee** |
| &nbsp;&nbsp;Registered Investment Companies | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
| &nbsp;&nbsp;Other Pooled Investment Vehicles | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
| &nbsp;&nbsp;Other Accounts | &nbsp;&nbsp;98 | &nbsp;&nbsp;$35921135 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |

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Currently, the investment objectives and investment strategies of the Fund and the other accounts managed by the Portfolio Managers are not similar. However, conflicts may arise in connection with their management of the Fund's investments and the investments in the other accounts. The Advisor has adopted the code of ethics as set forth by The CFA Institute. This code specifically addresses issues involving duties to clients and conflicts of interest. Furthermore, the Advisor maintains trading procedures that minimize the potential for conflicts. Further details of these procedures are outlined in the "Portfolio Transactions and Brokerage" section of this SAI. The Advisor is satisfied that the current policies and procedures of the Advisor are adequate to address conflicts of interest and protect the rights of shareholders.

The following table shows the dollar range of equity securities of the Fund beneficially owned by the Portfolio Managers in the Fund as of March 31, 2025.

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| | |
|:---|:---|
| &nbsp;&nbsp;**Name of Portfolio Manager** | &nbsp;&nbsp;**Dollar Range of Equity Securities in the Fund** |
| &nbsp;&nbsp;Matthew P. Reiner | &nbsp;&nbsp;$500,001 to $1,000,000 |
| &nbsp;&nbsp;Gregory Roeder | &nbsp;&nbsp;$100,001 to $500,000 |

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Custodian

The Huntington National Bank, a national banking association having its principal office at 41 South High Street, Columbus, Ohio 43215, is custodian of the Fund's investments. The custodian acts as the Fund's depository, safekeeps its portfolio securities, collects all income and other payments with respect thereto, disburses funds at the Fund's request and maintains records in connection with its duties.

Transfer Agent and Fund Accountant

Mutual Shareholder Services, LLC ("MSS"), 8000 Town Centre Drive Suite 400, Broadview Heights, OH 44147, acts as the Fund's transfer agent. MSS maintains the records of the shareholder's account, answers shareholders' inquiries concerning their accounts, processes purchases and redemptions of the Fund's shares, acts as dividend and distribution disbursing agent and performs other transfer agent and shareholder service functions. MSS receives an annual fee from the Fund of $11.50 per shareholder account (subject to a minimum monthly fee of $775.00 per Fund) for these transfer agency services.

In addition, MSS provides the Fund with fund accounting services, which includes certain monthly reports, record-keeping and other management-related services. For its services as Fund Accountant, MSS receives an annual fee from the Fund based on the average value of the Fund's assets. These fees are: from $0 to $25 million in assets, the annual fee is $21,000; from $25 million to $50 million in assets, the annual fee is $30,500; from $50 million to $75 million in assets, the annual fee is $36,250; from $75 million to $100 million in assets, the annual fee is $42,000; from $100 million to $125 million in assets, the annual fee is $47,750; from $125 million to $150 million in assets, the annual fee is $53,500; from $150 million to $200 million in assets, the annual fee is $59,250; from $200 million to $300 million in assets, the annual fee is $59,250 plus .01% on assets greater than $200 million; and for assets at or above $300 million, the annual fee is $69,250 plus .005% on assets greater than $300 million.

For the fiscal years ended March 31, 2023, March 31, 2024, and March 31, 2025, MSS received $45,081, $45,163, and $45,096, respectively, from the Fund or the Advisor for these fund accounting and transfer agent services.

Independent Registered Public Accounting Firm

The firm of Sanville & Company, 2617 Huntingdon Pike, Huntingdon Valley, PA 19006, has been selected as the independent registered public accounting firm for the Trust for the fiscal year ending March 31, 2026. Sanville & Company performs an annual audit of the Fund's financial statements and provides dividend review and tax preparation services as requested.

**Determination of Share Price**

The price (net asset value) of the shares of the Fund is determined at the close of trading (normally 4:00 p.m. Eastern Time) on each day the New York Stock Exchange is open for business (the Exchange is closed on weekends, New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day). Equity securities generally are valued on the basis of prices furnished by a pricing service when the Board believes such prices accurately reflect the fair market value of such securities. Securities that are traded on any stock exchange or on the NASDAQ over-the-counter market are generally valued by a pricing service at the last quoted sale price. Lacking a last sale price, an equity security is generally valued by a pricing service at its last bid price. When market quotations are not readily available from a pricing service, when the Board determines that the market quotation or the price provided by the pricing service does not accurately reflect the current market value, when restricted or illiquid securities are being valued, or when an event occurs after the close of trading (but prior to the time the net asset value is calculated) that materially affects fair market value, such securities are fair valued as determined in good faith by the Board, in conformity with guidelines adopted by the Board.

Fixed income securities generally are valued on the basis of prices furnished by a pricing service when the Board believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. If the Board decides that a price provided by a pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service, when restricted or illiquid securities are being valued, or when an event occurs after the close of trading (but prior to the time the net asset value is calculated) that materially affects fair market value, securities are valued at fair value as determined in good faith by the Board, in conformity with guidelines adopted by and subject to review of the Board. Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value.

The Board annually reviews and approves the use of the pricing services, including the methodology used by the pricing services to value securities. The Board will initially approve and annually reapprove use of a pricing service if it is satisfied that the methodology used by the pricing service will result in the fair market valuation of Fund securities.

**Additional Tax Information**

The Fund has qualified, and intends to continue to qualify, as a regulated investment company ("RIC"), under the Internal Revenue Code of 1986, as amended. Qualification generally will relieve the Fund of liability for federal income taxes. If for any taxable year the Fund does not qualify for the special tax treatment afforded regulated investment companies, all of its taxable

income will be subject to federal tax at regular corporate rates (without any deduction for distributions to its shareholders). In such event, dividend distributions would be taxable to shareholders to the extent of the Fund's earnings and profits, and would be eligible for the dividends-received deduction for corporations.

The Fund's net realized capital gains from securities transactions will be distributed only after reducing such gains by the amount of any available capital loss carryforwards. Capital losses incurred may be carried forward indefinitely and retain the character of the original loss. Capital loss carryforwards are available to offset future realized capital gains. To the extent that these carryforwards are used to offset future capital gains it is probable that the amount offset will not be distributed to shareholders.

An additional 3.8% Medicare tax is generally imposed on certain net investment income (including ordinary dividends and capital gain distributions received from the Fund and net gains from redemptions or other taxable dispositions of Fund shares) of U.S. individuals, estates and trusts to the extent that any such person's "modified adjusted gross income" (in the case of an individual) or "adjusted gross income" (in the case of an estate or trust) exceeds certain threshold amounts. Shareholders should consult their tax advisers about the application of federal, state, local and foreign tax law in light of their particular situation.

Payments to a shareholder that is either a foreign financial institution ("FFI") or a non-financial foreign entity ("NFFE") within the meaning of the Foreign Account Tax Compliance Act ("FATCA") may be subject to a generally nonrefundable 30% withholding tax on: (a) income dividends paid by the Fund and (b) certain capital gain distributions and the proceeds arising from the sale of Fund shares paid by the Fund. FATCA withholding tax generally can be avoided: (a) by an FFI, subject to any applicable intergovernmental agreement or other exemption, if it enters into a valid agreement with the IRS to, among other requirements, report required information about certain direct and indirect ownership of foreign financial accounts held by U.S. persons with the FFI and (b) by an NFFE, if it: (i) certifies that it has no substantial U.S. persons as owners or (ii) if it does have such owners, reports information relating to them. A Fund may disclose the information that it receives from its shareholders to the IRS, non-U.S. taxing authorities or other parties as necessary to comply with FATCA. Withholding also may be required if a foreign entity that is a shareholder of a Fund fails to provide the Fund with appropriate certifications or other documentation concerning its status under FATCA.

**Control Persons and Principal Holders of Securities**

As of July 1, 2025, the following persons were the owners of more than 5% of the outstanding shares of the Fund:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Name and Address** | &nbsp;&nbsp;**Percentage of Ownership** | &nbsp;&nbsp;**Type of Ownership** |
| &nbsp;&nbsp; National Financial Service Corp.<br> 200 Liberty Street<br> New York, NY 10281 | &nbsp;&nbsp;36.60% | &nbsp;&nbsp;Record |
| &nbsp;&nbsp; <br> Charles Schwab<br> 101 Montgomery St.<br> San Francisco, CA 94104<br>| &nbsp;&nbsp;24.34% | &nbsp;&nbsp;Record |
| &nbsp;&nbsp; LPL Financial LLC<br> 4707 Executive Drive<br> San Diego, CA 92121 | &nbsp;&nbsp;9.12% | &nbsp;&nbsp;Record |
| &nbsp;&nbsp; Pershing LLC<br> 1 Pershing Plaza<br> Jersey City, NJ 07399 | &nbsp;&nbsp;6.26% | &nbsp;&nbsp;Record |

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Shareholders owning more than 25% of the shares of the Fund may be deemed to "control" the Fund as that term is defined under the 1940 Act. Persons controlling the Fund can determine the outcome of any proposal submitted to the shareholders for approval, including changes to the Fund's fundamental policies or the terms of the Management Agreement with the Advisor.

**Management Ownership**

As of July 1, 2025, all officers and trustees as a group owned 6.22% of the outstanding shares of the Fund.

**Trustees and Officers**

The Board supervises the business activities of the Trust. Each Trustee serves until the termination of the Trust unless the Trustee dies, resigns, retires or is removed. As of the date of this Statement of Additional Information, the Fund is the only series in the "Fund Complex."

The following table provides information regarding each Trustee who is not an "interested person" of the Trust, as defined in the 1940 Act.

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;<br> **Name, Address and Year of Birth** | &nbsp;&nbsp;**Position & Length of Time Served with the Trust** | &nbsp;&nbsp;**Number of Portfolios Overseen** | &nbsp;&nbsp; **Principal Occupations and Directorships**<br> **During Past 5 Years** |
| &nbsp;&nbsp; Kevin Gallagher<br> 2390 Western Avenue,<br> Guilderland, NY 12084<br> Year of Birth: 1964 | &nbsp;&nbsp;Trustee since March 2005 | &nbsp;&nbsp;1 | &nbsp;&nbsp;Owner and Managing Partner of Panurgy NY Metro, LLC (information technology services firm) since 2004. |
| &nbsp;&nbsp; Wade Coton<br> 2390 Western Avenue,<br> Guilderland, NY 12084<br> Year of Birth: 1968 | &nbsp;&nbsp;Trustee since March 2005 | &nbsp;&nbsp;1 | &nbsp;&nbsp;Owner, Manchester Homes, LLC since March 2013. |
| &nbsp;&nbsp; Norman Joseph Plourde<br> 2390 Western Avenue, Guilderland, NY 12084<br> Year of Birth: 1963 | &nbsp;&nbsp;Trustee since March 2005 | &nbsp;&nbsp;1 | &nbsp;&nbsp; Retired (since April 2025); Manufacturing Consultant (March 2024 – March 2025). President, Ideal Wood Products (January 2015 – February 2024). <br>|

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The following table provides information regarding each Trustee who is an "interested person" of the Trust, as defined in the 1940 Act, and each officer of the Trust.

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; **Name, Address and Year of Birth**<br>| &nbsp;&nbsp;**Position & Length of Time Served with the Trust** | &nbsp;&nbsp;**Number of Portfolios Overseen** | &nbsp;&nbsp; **Principal Occupations and Directorships**<br> **During Past 5 Years** |
| &nbsp;&nbsp; Gregory A. Roeder<br> 2390 Western Avenue, Guilderland, NY 12084<br> Year of Birth: 1963 | &nbsp;&nbsp; President and Chief Executive Officer since March 2005<br>| &nbsp;&nbsp;N/A | &nbsp;&nbsp;President and Portfolio Manager, Adirondack Research & Management, Inc. from 2004 to present. |
| &nbsp;&nbsp; Jarrod H. Becker<br> 45 Nashville Rd.<br> Jericho, VT 05465<br> Year of Birth: 1977 | &nbsp;&nbsp;Secretary since 2011; Chief Compliance Officer since 2010 | &nbsp;&nbsp;N/A | &nbsp;&nbsp; CCO, Adirondack Research & Management, Inc. from July 2013 to present. <br>|
| &nbsp;&nbsp; Matthew P. Reiner<br> 2390 Western Avenue, Guilderland, NY 12084<br> Year of Birth: 1965 | &nbsp;&nbsp; Treasurer and Principal Financial Officer since March 2005<br>| &nbsp;&nbsp;N/A | &nbsp;&nbsp;CFO and Portfolio Manager, Adirondack Research & Management, Inc. from February 2005 to present. |

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The Trust's audit committee consists of Messrs. Gallagher, Coton and Plourde. The audit committee is responsible for appointing and setting compensation for the registered independent public accounting firm; overseeing the Fund's accounting and financial reporting policies and practices, its internal controls and, as appropriate, the internal controls of certain service providers; overseeing the quality and objectivity of the Fund's financial statements and the independent audit of the financial statements; and acting as a liaison between the Fund's independent public accountants and the Board. The audit committee met twice during the fiscal year ended March 31, 2025.

The Trust is led by Mr. Gallagher, an Independent Trustee who has served as the Chairman of the Board since the Fund's inception. The Board is comprised of Messrs. Gallagher, Coton and Plourde, each an independent Trustee.

Pursuant to the power delegated to the Chairman by the Board at the organizational meeting of the Board, the Chairman of the Board presides at all meetings of the Board and performs such other duties as are appropriate as Chairman.

The Trust has separate roles for the President of the Trust and Chairman of the Board because the Board believes that a Chairman that is not part of the management team brings a unique and independent perspective to the Board and enhances a culture where critical assessment and open dialogue among the Board members is encouraged. The Board believes that the Trust's leadership structure consisting of an independent Chairman, together with the Audit Committee and the Board, is suitable for the Trust based on the fact that: (i) the Audit Committee supports the independent Trustees in acting independently in pursuing the best interests of the Fund and its shareholders, facilitates the timely and efficient consideration of all matters of importance to independent Trustees, the Fund, and Fund shareholders and facilitates compliance with legal and regulatory requirements; and (ii) as mentioned above, the Chairman sets a tone for the Board of independence in its oversight of management.

Mr. Coton received a Bachelor of Science in Civil Engineering from The University at Buffalo in 1990. He was employed as a Junior Civil Engineer with Ecology and Environment Inc. from 1990 to 1992. He also served as Associate Engineer in Anchorage, Alaska from 1992 to 1994. Mr. Coton joined his family's construction and homebuilding company, Richard H. List Inc., in 1995 as estimator, subcontractor and Field Supervisor. From January 2007 until February 2013, Mr. Coton was a Principal in LDM Management Group Inc., a homebuilding and land development company. In March 2013, he became the owner of Manchester Homes, LLC. He is competent to serve on the Board because of his extensive business experience.

Mr. Gallagher holds a Bachelor of Science from the State University of New York at Plattsburgh and a Masters of Business Administration from Fairleigh Dickinson University. After obtaining his degrees, he held various senior level positions in General Management and National Sales at Coca-Cola Enterprises for 15 years. He has been the Managing Partner of Panurgy NY Metro LLC since March 2004. He also served on the Board of Trustees of two non-profit organizations for a total of approximately seven years. He is competent to serve on the Board because of his extensive business and board membership experience.

Mr. Plourde graduated from Alfred State College in 1983 with an Associate of Science degree in Business Administration. He transferred into the School of Business and Economics at Plattsburgh State University and graduated in 1985 with a Bachelor of Science in Business Administration. In 1985, Mr. Plourde was hired as General Manager and Treasurer of P&R Truss Company until 2001 when that company was sold to Universal Forest Products. In 2001, Mr. Plourde became a partner at Ideal Wood Products and was Treasurer until 2006, at which time he became a Principal partner and General Manager of Operations. He served as President from January 2015 to February 2024. Before retiring in 2025, Mr. Plourde was a manufacturing consultant from March 2024 to March 2025. He is competent to serve on the Board based on his extensive business experience.

As of December 31, 2024, the Board owned the following amounts in the Fund:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Name of Trustee** | &nbsp;&nbsp;**Dollar Range of Securities in the Fund** | &nbsp;&nbsp;**Aggregate Dollar Range of Securities in the Trust** |
| &nbsp;&nbsp;Norman J. Plourde | &nbsp;&nbsp;Over $100,000 | &nbsp;&nbsp;Over $100,000 |
| &nbsp;&nbsp;Kevin Gallagher | &nbsp;&nbsp;Over $100,000 | &nbsp;&nbsp;Over $100,000 |
| &nbsp;&nbsp;Wade Coton | &nbsp;&nbsp;$50001-$100000 | &nbsp;&nbsp;$50001-$100000 |

---

The following table describes the compensation paid to the Board for the fiscal year ended March 31, 2025.

---

| | | |
|:---|:---|:---|
| **<u>Name</u>** | **<u>Aggregate Compensation from the Fund</u>** | **<u>Total Compensation from the Trust</u>** |
| Wade Coton | &nbsp;&nbsp;$6000 | &nbsp;&nbsp;$6000 |
| Kevin Gallagher | &nbsp;&nbsp;$6000 | &nbsp;&nbsp;$6000 |
| Norman Joseph Plourde | &nbsp;&nbsp;$6000 | &nbsp;&nbsp;$6000 |

---

The Fund does not intend to pay any retainer fees to its officers for their services as such. Since October 1, 2020, each Trustee is paid a fee of $1,500 for each quarter that he is a member of the Board, in addition to reimbursing each Trustee for travel and incidental expenses incurred in connection with his attendance at Board meetings. The Board does not receive pension or retirement benefits.

**Portfolio Transactions and Brokerage**

Subject to policies established by the Board, the Advisor is responsible for the Fund's portfolio decisions and the placing of the Fund's portfolio transactions. In placing portfolio transactions, the Advisor seeks the best qualitative execution for the Fund, taking into account such factors as price (including the applicable brokerage commission or dealer spread), the execution capability, financial responsibility and responsiveness of the broker or dealer and the brokerage and research services provided by the broker or dealer. The Advisor generally seeks favorable prices and commission rates that are reasonable in relation to the benefits received. The Advisor may not give consideration to sales of shares of the Fund as a factor in the selection of brokers and dealers to execute portfolio transactions. However, the Advisor may place portfolio transactions with brokers or dealers that promote or sell the Fund's shares so long as such placements are made pursuant to policies approved by the Board that are designed to ensure that the selection is based on the quality of the broker's execution and not on its sales efforts. For the fiscal years ended March 31, 2023, March 31, 2024, and March 31, 2025, the Fund paid brokerage commissions of $96,753, $73,000 and $88,803, respectively.

Soft dollar commissions for the fiscal year ended March 31, 2025 totaled $88,571 on $28,746,181 in transactions.

The Advisor is specifically authorized to select brokers or dealers who also provide brokerage and research services to the Fund and/or the other accounts over which the Advisor exercises investment discretion and to pay such brokers or dealers a commission in excess of the commission another broker or dealer would charge if the Advisor determines in good faith that the commission is reasonable in relation to the value of the brokerage and research services provided. The determination may be viewed in terms of a particular transaction or the Advisor's overall responsibilities with respect to the Trust and to other accounts over which it exercises investment discretion.

Research services include supplemental research, securities and economic analyses, statistical services and information with respect to the availability of securities or purchasers or sellers of securities and analyses of reports concerning performance of accounts. The research services and other information furnished by brokers through whom the Fund effects securities transactions may also be used by the Advisor in servicing all of its accounts. Similarly, research and information provided by brokers or dealers serving other clients may be useful to the Advisor in connection with its services to the Fund. Although research services and other information are useful to the Fund and the Advisor, it is not possible to place a dollar value on the research and other information received. It is the opinion of the Board and the Advisor that the review and study of the research and other information will not reduce the overall cost to the Advisor of performing its duties to the Fund under the Agreement.

Over-the-counter transactions will be placed either directly with principal market makers or with broker-dealers, if the same or a better price, including commissions and executions, is available. Fixed income securities may be purchased directly from the issuer, an underwriter or a market maker. Purchases include a concession paid by the issuer to the underwriter and the purchase price paid to a market maker may include the spread between the bid and asked prices.

When the Fund and another of the Advisor's clients seek to purchase or sell the same security at or about the same time, the Advisor will execute the transaction on a combined ("blocked") basis to insure consistent and fair execution. Blocked transactions can produce better execution for the Fund because of the increased volume of the transaction. If the entire blocked order is not filled, the Fund may not be able to acquire as large a position in such security as it desires or it may have to pay a higher price for the security. Similarly, the Fund may not be able to obtain as large an execution of an order to sell or as high a price for any particular portfolio security if the other client desires to sell the same portfolio security at the same time. The Advisor will keep records of all block trades or have access to them electronically. If a block order is filled at varying prices, the Advisor or the broker used will compute the average price and allocate the trades at the average price as well as transaction costs to all clients on a pro-rata basis. The Advisor will maintain the computations of the average price/transaction costs and specific allocation either on, or as an attachment to, the block order ticket, or have access to the computations of the average price/transaction costs and specific allocation electronically. In the event a block trade is not filled in its entirety, the Advisor will allocate the completed portion among clients on an equal sharing or, if the number of shares is not equally distributable or if the Adviser decides for another reason(s) not to equally distribute a block trade not completely filled, on a specific

allocation basis. If on a specific allocation basis, the Advisor's President, Vice-President, or Chief Compliance Officer will document and sign the rationale for such specific allocation. The Advisor will maintain documentation of the allocation on, or as an attachment to, the block order ticket, or have access to the documentation of the allocation electronically. The Advisor and its investment advisor representatives will not receive additional compensation as a result of block trades.

**Financial Statements**

The financial statements and independent registered public accounting firm's report required to be included in this Statement of Additional Information are incorporated herein by reference to the Fund's Annual Form N-CSR dated March 31, 2025. You can obtain the [Annual Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/1311981/000116204425000600/adirondackncsr.htm) without charge by calling the Fund at 1-888-686-2729.

**PART C: OTHER INFORMATION**

**Item 28. Exhibits**

(a)&nbsp;&nbsp;&nbsp;&nbsp; [Articles of Incorporation](https://www.sec.gov/Archives/edgar/data/1311981/000116204404000441/adirondacdeclarationoftrust.htm). Registrant's Agreement and Declaration of Trust is incorporated by reference to Exhibit 23(a) to Registrant's Registration Statement on Form N-1A filed with the Securities and Exchange Commission ("SEC") on December 28, 2004.

(b)&nbsp;&nbsp;&nbsp;&nbsp; [By-laws](https://www.sec.gov/Archives/edgar/data/1311981/000116204411000657/adiron485bposexb201107.htm). Registrant's By-laws are incorporated by reference to Exhibit 28(b) to Post-Effective Amendment No. 9 to Registrant's Registration Statement on Form N-1A filed with the SEC on July 29, 2011.

(c)&nbsp;&nbsp;&nbsp;&nbsp; Instruments Defining Rights of Security Holders. None (other than in the Declaration of Trust and By-laws of the Registrant).

(d)&nbsp;&nbsp;&nbsp;&nbsp; Investment Advisory Contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp; [Registrant's Management Agreement](https://www.sec.gov/Archives/edgar/data/1311981/000116204406000271/ex9923di.htm) dated as of April 17, 2005 between Registrant and Adirondack Research & Management, Inc. is incorporated by reference to Exhibit 23(d)(i) to Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A filed with the SEC on July 6, 2006.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp; [Registrant's Management Agreement Supplement](https://www.sec.gov/Archives/edgar/data/1311981/000116204418000433/mgmntfeerednotice.htm) dated July 27, 2018 between Registrant and Adirondack Research & Management, Inc. is incorporated by reference to Exhibit 28(d)(ii) to Post-Effective Amendment No. 23 to Registrant's Registration Statement on Form N-1A filed with the SEC on July 27, 2018.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp; Registrant's Letter Agreement between Registrant and Adirondack Research & Management, Inc. is filed herewith.

(e)&nbsp;&nbsp;&nbsp;&nbsp; Underwriting Contracts. None.

(f)&nbsp;&nbsp;&nbsp;&nbsp; Bonus or Profit Sharing Contracts. None.

(g)&nbsp;&nbsp;&nbsp;&nbsp; [Custodian Agreements](https://www.sec.gov/Archives/edgar/data/1311981/000116204405000113/adirondackcustodayagreement0.htm). Registrant's Custodian Agreement dated as of March 29, 2005 between Registrant and The Huntington National Bank is incorporated by reference to Exhibit 23(g) to Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A filed with the SEC on April 1, 2005.

(h)&nbsp;&nbsp;&nbsp;&nbsp; Other Material Contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp; [Transfer Agent Agreement](https://www.sec.gov/Archives/edgar/data/1311981/000116204405000113/adirondacktransferagentagree.htm) dated as of March 18, 2005 between Registrant and Mutual Shareholder Services, LLC is incorporated by reference to Exhibit 23(h)(i) to Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A filed with the SEC on April 1, 2005.

&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;&nbsp; [Accounting Services Agreement](https://www.sec.gov/Archives/edgar/data/1311981/000116204405000113/adirondackaccountingservices.htm) dated as of March 18, 2005 between Registrant and Mutual Shareholder Services, LLC is incorporated by reference to Exhibit 23(h)(ii) to Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A filed with the SEC on April 1, 2005.

(i)&nbsp;&nbsp;&nbsp;&nbsp; Legal Opinion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp; [Opinion of Thompson Hine LLP](https://www.sec.gov/Archives/edgar/data/1311981/000116204405000115/adirondackthompsonhineopinio.htm) is incorporated by reference to Exhibit 23(i) to Pre-Effective Amendment No. 2 to Registrant's Registration Statement on Form N-1A filed with the SEC on April 6, 2005.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp; Consent of Thompson Hine LLP is filed herewith.

(j)&nbsp;&nbsp;&nbsp;&nbsp; Other Opinions. Consent of Independent Registered Public Accountants is filed herewith.

(k)&nbsp;&nbsp;&nbsp;&nbsp; Omitted Financial Statements. None.

(l)&nbsp;&nbsp;&nbsp;&nbsp; [Initial Capital Agreements](https://www.sec.gov/Archives/edgar/data/1311981/000116204405000113/adirondacksubscriptionagreem.htm). Letters of Initial Stockholder are incorporated by reference to Exhibit 23(l) to Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A filed with the SEC on April 1, 2005.

(m)&nbsp;&nbsp;&nbsp;&nbsp; Rule 12b-1 Plan. None.

(n)&nbsp;&nbsp;&nbsp;&nbsp; Rule 18f-3 Plan. None.

(o)&nbsp;&nbsp;&nbsp;&nbsp; Reserved.

(p)&nbsp;&nbsp;&nbsp;&nbsp; Code of Ethics. The Adirondack Funds/Adirondack Research & Management, Inc. Code of Ethics is filed herewith.

(q)&nbsp;&nbsp;&nbsp;&nbsp; [Powers of Attorney for Registrant](https://www.sec.gov/Archives/edgar/data/1311981/000116204405000113/adirondackpowerofattorney.htm) (and Certificate with respect thereto) and the Trustees and Officers of the Registrant are incorporated by reference to Exhibit 23(q) to Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A filed with the SEC on April 1, 2005.

**Item 29. Persons Controlled by or Under Common Control with the Fund**

None.

**Item 30. Indemnification**

(a)&nbsp;&nbsp;&nbsp;&nbsp; Article VI of the Registrant's Declaration of Trust provides for indemnification of officers and Trustees as follows:

<u>Section 6.6 Indemnification Not Exclusive, etc.</u> The right of indemnification provided by this Article VI shall not be exclusive of or affect any other rights to which any such Covered Person may be entitled. As used in this Article VI, "Covered Person" shall include such person's heirs, executors and administrators. Nothing contained in this article shall affect any rights to indemnification to which personnel of the Trust, other than Trustees and officers, and other persons may be entitled by contract or otherwise under law, nor the power of the Trust to purchase and maintain liability insurance on behalf of any such person.

The Registrant may not pay for insurance which protects the Trustees and officers against liabilities rising from action involving willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of their offices.

(b)&nbsp;&nbsp;&nbsp;&nbsp; The Registrant may maintain a standard mutual fund and investment advisory professional and directors and officers liability policy. The policy, if maintained, would provide coverage to the Registrant, its Trustees and officers, and could cover the adviser, among others. Coverage under the policy would include losses by reason of any act, error, omission, misstatement, misleading statement, neglect or breach of duty.

(c)&nbsp;&nbsp;&nbsp;&nbsp; Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the provisions of Ohio law and the Agreement and Declaration of the Registrant or the By-Laws of the Registrant, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Trust in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

**Item 31. Business and Other Connections of the Investment Adviser**

Adirondack Research & Management, Inc. has engaged in no other business during the past two fiscal years. Information about the officers and directors of Adirondack Research and Management, Inc. is incorporated herein by reference to the Fund's Statement of Additional Information filed herewith, and the Adviser's Form ADV, registration number 801-63015.

**Item 32. Principal Underwriters**

None.

**Item 33. Location of Accounts and Records**

Accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder will be maintained by the Registrant at 2390 Western Avenue, Guilderland, NY 12084, and by the Registrant's transfer agent, Mutual Shareholder Services LLC, at 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147.

**Item 34. Management Services Not Discussed in Parts A or B**

None.

**Item 35. Undertakings**

None.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under Rule 485(b) under the Securities Act and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Guilderland, State of New York, on the 29th day of July, 2025.

ADIRONDACK FUNDS

By: <u>/s/ Gregory A. Roeder</u>

Gregory A. Roeder\*

President/Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on the 29th day of July, 2025.

Gregory A. Roeder,\* President/Principal Executive Officer

Wade Coton,\* Trustee

Kevin Gallagher,\* Trustee

Norman Joseph Plourde,\* Trustee

Matthew P. Reiner,\* Treasurer/Principal Financial Officer/Principal Accounting Officer

\*By: <u>/s/ JoAnn M. Strasser</u> 

JoAnn M. Strasser

Attorney-in-Fact

**<u>EXHIBIT INDEX</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Consent of Thompson Hine EX-99.28.i.ii

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Consent of Auditors EX-99.28.j

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Letter Agreement EX-99.28.d.iii

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Code of Ethics EX-99.28.p

## Ex-99.D

**<u>Letter Agreement</u>**

To: Adirondack Funds

2390 Western Avenue

Guilderland, NY 12084<br>

Dear Sirs:

You have engaged us to act as the sole investment adviser to The Adirondack Small Cap Fund (the "Fund") pursuant to a Management Agreement dated as of April 17, 2005 (the "Agreement").

Effective August 1, 2025 until August 1, 2026, we hereby contractually agree to waive management fees and/or reimburse the Fund for expenses it incurs, but only to the extent necessary to maintain the Fund's total annual operating expenses (excluding brokerage costs, borrowing costs (such as interest and dividends on securities sold short), taxes, extraordinary expenses, and costs of acquired funds) at 1.48% of its average daily net assets for that period.

Any waiver or reimbursement by us is subject to repayment by the Fund within three years after the waived or reimbursed expenses occurred, if the Fund is able to make the repayment without exceeding the lesser of its current expense limitation or the expense limitation in effect at the time of the reduction, and the repayment is approved by the Board of Trustees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Very truly yours,<br>ADIRONDACK RESEARCH AND MANAGEMENT, INC.<br>By: <u>__ /s/ Matthew P. Reiner</u><br> Name: Matthew P. Reiner<br> Title: Chief Financial Officer<br>

<u>Acceptance</u>

The foregoing Agreement is hereby accepted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ADIRONDACK FUNDS<br>By: <u>___/s/ Matthew P. Reiner</u><br> Name: Matthew P. Reiner<br> Title: Treasurer<br>

## Ex-99.I

![](legal_001.jpg)

July 29, 2025

Adirondack Funds

2390 Western Avenue

Guilderland, NY 12084

Re: Adirondack Funds, File Nos. 333-121690 and 811-21691

Gentlemen:

A legal opinion (the "Legal Opinion") that we prepared was filed with Pre-Effective Amendment No. 2 to the Adirondack Funds Registration Statement (the "Registration Statement"). We hereby give you our consent to incorporate by reference the Legal Opinion into Post-Effective Amendment No. 34 to the Registration Statement under the Securities Act of 1933, Post-Effective Amendment No. 36 under the Investment Company Act of 1940 (the "Amendment"), and consent to all references to us in the Amendment.

Very truly yours,

/s/ Thompson Hine LLP

THOMPSON HINE LLP

![](legal_002.jpg)

## Ex-99.J

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

As the independent registered public accounting firm, we hereby consent to the use of our report, dated May 22, 2025, for the Adirondack Small Cap Fund (the "Fund") and to all references to our firm included in or made a part of this Post-Effective Amendment No. 34 under the Securities Act of 1933 and Post-Effective Amendment No. 36 under the Investment Company Act of 1940 to Adirondack Fund's Registration Statement on Form N-1A (File Nos. 333-121690 and 811-21691), including the references to our firm under the heading "Financial Highlights" in the Prospectus and "Independent Registered Public Accounting Firm and Financial Statements" in the Statement of Additional Information of the Fund.

![Shape Description automatically generated with medium confidence](auditorconsent_001.gif)

Huntingdon Valley, Pennsylvania

July 29, 2025

## Ex-99.P

**<u>4.2</u>**

<u>Code of Ethics</u>

**CODE OF ETHICS**

**I.** **Statement of General Principles**

This Code of Ethics has been adopted by Adirondack Funds (the "Trust") and Adirondack Research and Management, Inc. ("ARMI" or the "Adviser"), the adviser to the Trust, for the purpose of instructing all employees, officers, directors and trustees of the Trust and ARMI, in their ethical obligations and to provide rules for their personal securities transactions. All such persons owe a fiduciary duty to the Trust and its shareholders. All such persons also owe a fiduciary duty to the other clients of ARMI. A fiduciary duty means a duty of loyalty, fairness and good faith towards the Trust, its shareholders, and other clients of ARMI, and the obligation to adhere not only to the specific provisions of this Code but to the general principles that guide the Code. These general principles are:

· The duty at all times to place the interests of the Trust, its shareholders, and other clients of ARMI first;

· The requirement that all personal securities transactions be conducted in a manner consistent with the Code of Ethics and in such a manner as to avoid any actual or potential conflict of interest or any abuse of any individual's position of trust and responsibility; and

· The fundamental standard that such employees, officers, directors and trustees should not take inappropriate advantage of their positions, or of their relationship with the Trust, its shareholders, and other clients of ARMI.

It is imperative that the personal trading activities of the employees, officers, directors and trustees of the Trust and the Adviser, respectively, be conducted with the highest regard for these general principles in order to avoid any possible conflict of interest, any appearance of a conflict, or activities that could lead to disciplinary action. This includes executing transactions through or for the benefit of a third party when the transaction is not in keeping with the general principles of this Code.

All personal securities transactions must also comply with the Securities & Exchange Commission's Rule 17j-1 and 204A-1. Under these rules, no Employee may:

· employ any device, scheme or artifice to defraud the Trust or any of its shareholders;

· make to the Trust or any of its shareholders any untrue statement of a material fact or omit to state to such client a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;

· engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the Trust or any of its shareholders; or

· engage in any manipulative practice with respect to the Trust or any of its shareholders.

**II.** **Definitions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Advisory Employees</u>: Employees who, in connection with their regular functions or duties, make, participate in, or obtain information regarding the purchase or sale of securities by a Fund or other clients of ARMI, or whose functions relate to the making of any recommendation with respect to purchases or sales. The Compliance Officer will maintain a current list of all Advisory Employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Beneficial Interest</u>: ownership or any benefits of ownership, including the opportunity to directly or indirectly profit or otherwise obtain financial benefits from any interest in a security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Compliance Officer</u>: the Compliance Officer for the Trust and ARMI is Jarrod Becker; with respect to reports from the Compliance Officer, Greg Roeder will review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Disinterested Trustees</u>: trustees of the Trust whose affiliation with the Trust is solely by reason of being a trustee of the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Employee Account</u>: each account in which an Employee or a member of his or her family has any direct or indirect Beneficial Interest or over which such person exercises control or influence, including, but not limited to, any joint account, partnership, corporation, trust or estate. An Employee's family members include the Employee's spouse, minor children, any person living in the home of the Employee and any relative of the Employee (including in-laws) to whose support an Employee directly or indirectly contributes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. <u>Employees</u>: the employees, officers, and trustees of the Trust and the employees, officers and directors of the Adviser. The Compliance Officer will maintain a current list of all Employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. <u>Exempt Transactions</u>: transactions which are 1) effected in an amount or in a manner over which the Employee has no direct or indirect influence or control, 2) pursuant to a systematic dividend reinvestment plan, systematic cash purchase plan or systematic withdrawal plan, 3) in connection with the exercise or sale of rights to purchase additional securities from an issuer and granted by such issuer pro-rata to all holders of a class of its securities, 4) in connection with the call by the issuer of a preferred stock or bond, 5) pursuant to the exercise by a second party of a put or call option, 6) closing transactions no more than five business days prior to the expiration of a related put or call option, 7) inconsequential to any Fund because the transaction is very unlikely to affect a highly liquid market or because the security is clearly not related economically to any securities that a Fund may purchase or sell.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. <u>Funds</u>: any series of the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. <u>Related Securities</u>: securities issued by the same issuer or issuer under common control, or when either security gives the holder any contractual rights with respect to the other security, including options, warrants or other convertible securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. <u>Securities</u>: any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general, any interest or instrument commonly known as a "security," or any certificate or interest or participation in temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase (including options) any of the foregoing; except for the following: 1) securities issued by the government of the United States,

2) bankers' acceptances, 3) bank certificates of deposit, 4) commercial paper, and 5) shares of unaffiliated registered open-end investment companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K. <u>Securities Transaction</u>: the purchase or sale, or any action to accomplish the purchase or sale, of a Security for an Employee Account.

**III.** **Personal Investment Guidelines**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.**

**Personal Accounts**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Personal Investment Guidelines in this Section III do not apply to Exempt Transactions unless the transaction involves a private placement or initial public offering. Employees must remember that regardless of the transaction's status as exempt or not exempt, the Employee's fiduciary obligations remain unchanged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. While trustees of the Trust are subject at all times to the fiduciary obligations described in this Code, the Personal Investment Guidelines and Compliance Procedures in Sections III and IV of this Code apply to Disinterested Trustees only if such person knew, or in the ordinary course of fulfilling the duties of that position, should have known, that during the fifteen days immediately preceding or after the date of such person's transaction that the same Security or a Related Security was or was to be purchased or sold for a Fund or that such purchase or sale for a Fund was being considered, in which case such Sections apply only to such transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Advisory Employees may not execute a Securities Transaction on a day during which a purchase or sell order in that same Security or a Related Security is pending for a Fund or other client of ARMI unless the Securities Transaction is combined ("blocked") with the Fund's or other client's transaction. Securities Transactions executed in violation of this prohibition shall be unwound or, if not possible or practical, the Advisory Employee must disgorge to the Fund/other client the value received by the Advisory Employee (via check) due to any favorable price differential received by the Advisory Employee. For example, if the Advisory Employee buys 100 shares at $10 per share, and the Fund buys 1000 shares at $11 per share, the Advisory Employee will pay $100 (100 shares x $1 differential) to the Fund. Disgorgement for any favorable price differential as discussed above will only be undertaken if it is above the de minimis amount of $25 per client account effected.

3-1.

Section 3 directly above (block trading) takes precedence over Section 3-1 (trading within three calendar days). Making sure trades are blocked with clients does more to insure potential conflicts of interest are minimized, front- running activities are minimized, and interests of clients come first than does the trading within three days policy (client and employee have exact same interest in trade at the same time, and employee can remove self from trade if trade not fully filled). As long as trades are blocked per Section 3 above, violation of trading within three days will not be considered. Otherwise, Advisory Employees may not execute a Securities Transaction within three calendar days during which a purchase or sell order in that same Security or a Related Security is pending for a Fund or other client of ARMI. Securities Transactions executed in violation of this prohibition shall be unwound or, if not possible or practical, the Advisory Employee must disgorge to the Fund/other client the value received by the Advisory Employee (via check) due to any favorable price differential received by the Advisory Employee. For example, if the Advisory Employee buys 100 shares at $10 per share, and the Fund buys 1000 shares at $11 per share, the Advisory Employee will pay $100 (100 shares x $1 differential) to the Fund. Disgorgement for any favorable price differential as discussed above will only be undertaken if it is above the de minimis amount of $25 per client account effected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Any Securities Transactions of an Advisory Employee in a private placement must be authorized by the Compliance Officer, in writing, prior to the transaction. In connection with a private placement acquisition, the Compliance Officer will take into account, among other factors, whether the investment opportunity should be reserved for a Fund or other client of ARMI, and whether the opportunity is being offered to the Advisory Employee by virtue of the Advisory Employee's position with the Trust or the Adviser. If the private placement acquisition is authorized, the Compliance Officer shall retain a record of the authorization and the rationale supporting the authorization. Advisory Employees who have been authorized to acquire securities in a private placement will, in connection therewith, be required to disclose that investment if and when the Advisory Employee takes part in any subsequent investment in the same issuer. In such circumstances, the determination to purchase Securities of that issuer on behalf of a Fund or other clients of ARMI will be subject to an independent review by personnel of the Adviser with no personal interest in the issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Advisory Employees are prohibited from acquiring any Securities in an initial public offering without the prior written approval of the Compliance Officer. This restriction is imposed in order to preclude any possibility of an Advisory Employee profiting improperly from the Advisory Employee's position with the Trust or the Adviser. If the initial public offering is authorized, the Compliance Officer shall retain a record of the authorization and the rationale supporting the authorization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.**

**Other Restrictions**

Advisory Employees are prohibited from serving on the boards of directors of publicly traded companies, absent prior authorization by the Compliance Officer. The consideration of prior authorization will be based upon a determination that the board service will be consistent with the interests of the Trust, the Funds' shareholders, and other clients of ARMI. In the event that board service is authorized, Advisory Employees serving as directors will be isolated from other Advisory Employees making investment decisions with respect to the securities of the company in question.

**IV.** **Compliance Procedures**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.**

**Employee Disclosure**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Within ten (10) days of commencement of employment with the Trust or the Adviser, each Employee must certify that he or she has read and understands this Code and recognizes that he or she is subject to it, and each Advisory Employee must disclose the following information, which information must be current as of a date no more than 45 days prior to the date the person became an Advisory Employee: a) the title, number of shares and principal amount of each Security in which the Advisory Employee has a Beneficial Interest when the person became an Advisory Employee, b) the name of any broker/dealer/bank with whom the Advisory Employee maintained an account in which any Securities are held for the direct or indirect benefit of the Advisory Employee when the person became an Advisory Employee, and c) the date the report is submitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Annually, each Employee must certify that he or she has read and understands this Code and recognizes that he or she is subject to it, that he or she has complied with the requirements of this Code and has disclosed or reported all personal Securities Transactions required to be disclosed or reported pursuant to the requirements of this Code. In addition, each Advisory Employee shall annually provide the following information (as of a date no more than 30 days before the report is submitted): a) the title, number of shares and principal amount of each Security in which the Advisory Employee had any Beneficial Interest, b) the name of any broker, dealer or bank with whom the Advisory Employee maintains an account in which any Securities are held for the direct or indirect benefit of the Advisory Employee, and c) the date the report is submitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.**

**Compliance**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. All Advisory Employees may provide copies of all periodic broker account statements to the Compliance Officer. If not, each Advisory Employee must report, no later than thirty (30) days after the close of each calendar quarter, on the Securities Transaction Report form provided by the Trust/Adviser, all transactions in which the Advisory Employee acquired or sold any direct or indirect Beneficial Interest in a Security, including Exempt Transactions, and certify that he or she has reported all transactions required to be disclosed pursuant to the requirements of this Code. The report will also identify any trading account, in which the Advisory Employee has a direct or indirect Beneficial Interest, established during the quarter with a broker, dealer or bank. The Advisory Employee may exclude transactions effected pursuant to an automatic investment plan. An automatic investment plan is a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Compliance Officer will, on a quarterly basis, check the trading account statements provided by brokers to verify that the Advisory Employee has not violated the Code. The Compliance Officer shall identify all Advisory Employees, inform those persons of their reporting obligations, and maintain a record of all current and former Advisory Employees (access persons).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. If an Employee violates this Code, the Compliance Officer will report the violation to management personnel of the Trust and/or the Adviser and set forth appropriate remedial action which, in addition to the actions specifically delineated in other sections of this Code, may include a reprimand of the Employee, or suspension or termination of the Employee's relationship with the Trust and/or the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The management personnel of the Trust and Adviser will prepare an annual report to the Trust's board of trustees, respectively, that summarizes existing procedures and any changes in the procedures made during the past year, and certifies to the Trust's Board of Trustees that the Adviser and the Trust have each adopted procedures reasonably necessary to prevent Advisory Employees from violating this Code. The report will describe any issues existing under this Code since the last report, including without limitation, information about any material violations of this Code, any significant remedial action during the past year and any recommended procedural or substantive changes to this Code based on management's experience under this Code, evolving industry practices or legal developments.

**Responsible Party/Compliance Process:** Chief Compliance Officer(s) of the Trust and ARMI, respectively.

**Approved**:__________________

**Revised**:____________________

**ANNUAL EMPLOYEE SECURITIES REPORT**

This information is current as of _______________ (must be current as of a date no more than 45 days before the Report is submitted). Please list all Securities in which you have a Beneficial Interest, as defined in the Code of Ethics.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;<br>Security (name, type, CUSIP or ticker symbol) | &nbsp;&nbsp;**# of Shares and Principal Amount** | &nbsp;&nbsp;<br>**Date Acquired** |

---

Please list all brokers, dealers and banks that maintain a brokerage account in which you have a Beneficial Interest, as defined in the Code of Ethics.

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Name of Broker, Dealer or Bank** | &nbsp;&nbsp;**Account Name** |

---

I certify that I have read and understand the Code of Ethics and recognize that I am subject to it. I certify that this is a complete list of all Securities in which I have a Beneficial Interest, and that I have complied with the requirements of the Code of Ethics including disclosure of all Securities Transactions for which the Code of Ethics requires disclosure.

Printed Name: _____________________________________ Signature: ________________________________________

Date: __________________________

**PRE-CLEARANCE OF SECURITY TRANSACTION**

To:

Compliance Officer

From: ____________________________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name of Employee)

Date: __________________________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I hereby seek approval for the □ purchase/□ sale of _____________shares or $___________par value of

__________________________ for the cash or margin account of ________________________.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The price per share or contract is approximately $_____________________.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The transaction □ is/□ is not in connection with a private placement or an initial public offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Said transaction was recommended to me by: _____________________________.

I have no knowledge of any pending purchase or sell order for this Security or a Related Security.

I have read the Code of Ethics within the past year and recognize that I am subject to it.

After inquiry, I am satisfied that this transaction is consistent with the Code of Ethics and the Insider Trading Policy. If I become aware that the trade does not comply with this Code or that the statements made on the request are no longer true, I will immediately notify the Compliance Officer.

_______________________________________________________

Signature of Employee

APPROVED: ____________________________

DATE: ___________________________

**TRANSACTION COMPLETED:** Date ___________

No. of Shares _________

Price ________

TRANSACTION UNFILLED: __________________________

<u>COMMENTS/FOLLOW UP</u>:

This authorization is valid until close of business on the second trading day following authorization.

**QUARTERLY SECURITIES TRANSACTION REPORT**

**Calendar Quarter/Year: ______________**

Persons subject to the Code of Ethics must report **ALL** Securities Transactions (including Exempt Transactions and transactions involving affiliated mutual Funds) as defined in the Code of Ethics, executed during the reporting period. **DO NOT ATTACH BROKERAGE REPORTS**. The report must be returned to the Compliance Officer, regardless of whether any Securities Transactions occurred, before the 30th day after the close of the calendar quarter. Please note that this Report covers all Securities in which you have a Beneficial Interest.

<br> □

I have executed no Securities Transactions during the quarter. □

The following is a complete list of my Securities Transactions:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>**Security\*** | &nbsp;&nbsp;&nbsp;&nbsp;<br>**Transaction Date** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>**Purchase,**<br> **Sale,**<br> **or Other** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**# of Shares & Principal**<br> **Amount**<br> **of Security** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>**Price** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>**Executing Broker** |

---

\*Provide interest rate, maturity date, ticker symbol or CUSIP, if applicable

I have not opened a brokerage account during the quarter.

The following is a complete list of all brokerage accounts I opened during the quarter:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Name of Broker, Dealer or Bank:** | &nbsp;&nbsp;**Account Name:** | &nbsp;&nbsp;**Date Established:** |

---

I certify that I have read and understand the Code of Ethics and that I have complied with the requirements of the Code of Ethics, including disclosure of all Securities Transactions that require disclosure.

Printed Name: _________________________________________ Signature: _________________________________________

Filing Date: _______________________________

THIS REPORT SHALL NOT BE CONSTRUED AS AN ADMISSION THAT THE REPORTING PERSON HAS ANY DIRECT OR INDIRECT BENEFICIAL OWNERSHIP IN ANY SECURITY TO WHICH THIS REPORT RELATES.

**NEW EMPLOYEE SECURITIES REPORT**

This information is current as of __________________ (must be current as of a date no more than 45 days before your commencing employment). *Return to Compliance Officer within 10 days of your commencing employment.*

Please list all Securities in which you have a Beneficial Interest, as defined in the Code of Ethics.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;<br>Security (name, type, CUSIP or ticker symbol) | &nbsp;&nbsp;**# of Shares or**<br> **Principal Amount** | &nbsp;&nbsp;<br>**Date Acquired** |

---

Please list all brokers, dealers and banks that maintain a brokerage account in which you have a Beneficial Interest, as defined in the Code of Ethics.

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Name of Broker, Dealer or Bank** | &nbsp;&nbsp;**Account Name** |

---

I certify that I have read and understand the Code of Ethics and recognize that I am subject to it. I certify that this is a complete list of all Securities in which I have a Beneficial Interest, and that I have complied with the requirements of the Code of Ethics including disclosure of all Securities Transactions for which the Code of Ethics requires disclosure.

Printed Name: __________________________________ Signature: ___________________________________

Date: ___________________________

**ANNUAL ISSUES REPORT AND CERTIFICATION OF ADIRONDACK FUNDS**

For the period _____________ to ____________

**A.** **Issues Report**. Rule 17j-1 under the 1940 Act requires that Adirondack Funds (the "Trust") submit at least annually, for the Board of Trustees' consideration, a written report describing any issues arising under the Trust's Code of Ethics, including, but not limited to, information about material violations of the code and sanctions imposed in response to the material violations.

[Describe all issues relevant to the Board or state that there are no issues to report.] No issues to report.

**B.** **Certification**. The undersigned authorized officer of the Trust hereby certifies to the Board that the Trust has adopted procedures reasonably necessary to prevent Access Persons (as defined in the Code) from violating the Code.

Date: _______________ Authorized Officer: ______________________________________

**ANNUAL ISSUES REPORT AND CERTIFICATION OF ADIRONDACK RESEARCH**

**AND MANAGEMENT, INC.**

For the period ____________ to ____________

**A.** **Issues Report**. Rule 17j-1 under the 1940 Act requires that Adirondack Research and Management, Inc. (the "Adviser"), adviser to the Adirondack Funds submit at least annually, for the Board of Trustees' consideration, a written report describing any issues arising under the Trust's Code of Ethics, including, but not limited to, information about material violations of the code and sanctions imposed in response to the material violations.

[Describe all issues relevant to the Board or state that there are no issues to report.] No issues to report.

**B.** **Certification**. The undersigned authorized officer of the Adviser hereby certifies to the Board that the Trust has adopted procedures reasonably necessary to prevent Access Persons (as defined in the Code) from violating the Code.

Date: ________________ Authorized Officer: ______________________________________

<br>