THE MP 63 FUND
PROSPECTUS

THE PURPOSE OF THE ABOVE TABLE IS TO HELP YOU UNDERSTAND THE VARIOUS COSTS AND EXPENSES THAT YOU, AS A SHAREHOLDER, WILL BEAR DIRECTLY OR INDIRECTLY IN CONNECTION WITH AN INVESTMENT IN THE FUND. THE EXAMPLE SET FORTH ABOVE ASSUMES REINVESTMENT OF ALL DIVIDENDS AND USES A 5% ANNUAL RATE OF RETURN AS REQUIRED BY SEC REGULATIONS.

NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The Fund pays certain operating expenses directly, including, but not limited to, custodial, auditing, and legal fees; fees of the independent directors; costs of printing and mailing prospectuses, statements of additional information, proxy statements, notices, and reports to shareholders; insurance expenses; and costs of registering its shares for sale under federal and state securities laws. See the Statement of Additional Information ("SAI") for a more detailed discussion of independent director compensation.

 

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE
The Fund seeks to provide investors with long-term capital appreciation through the accumulation of shares of common stock. The Advisor will make no effort to time the market, and its investment decisions will not be influenced by movement in the stock market in general, and will not respond to the day-to-day ups and downs of the business activities of the companies it holds. The Advisor identifies companies primarily on the basis of the Moneypaper 63 Stock Index (MP 63 Index), which is composed of common stocks of companies that encourage shareholders to participate in their direct investment plans. The Fund will continue to acquire and hold such common stocks, provided the companies continue to meet the Fund's and the Advisor's investment criteria outlined below.

Unlike many other equity mutual funds, the Fund does not view a drop in the value of the shares held by the Fund as a negative occurrence. When the market price of its holdings is relatively low, it will be able to buy more shares than it would if the price were higher. Because the Fund expects to accumulate shares in the same companies over a period of years, drops in the market prices of any of its holdings give the Fund the ability to buy shares at favorable prices.

Investors are encouraged to add to their Fund positions regularly as a means of accumulating assets slowly over the long term. Investors redeeming their shares in fewer than five years will be subject to a redemption fee. See "How to Redeem Shares", below. It is anticipated that over any 10-year period the Fund will have accumulated more shares at lower prices than it accumulated at higher prices; thus the long-term investor in the Fund has increased the likelihood of achieving the investment objective and has reduced the risk of negative results.

The Fund is not intended to be a complete investment program. There is no assurance that the Fund will achieve its investment objective, which may not be changed without shareholder approval. However, specific investment policies employed by the Advisor to achieve the Fund's objective may be changed or eliminated by the Fund's Board of Directors without shareholder approval. The Fund has also adopted investment restrictions, most of which may not be changed without shareholder approval. See "Investment Objective, Policies and Restrictions" in the SAI.

INVESTMENT POLICIES
The Fund seeks to achieve its investment objective by investing in a diversified portfolio of common stocks of companies that offer direct investment plans. The Fund will have a wide representation among industries. The Fund will invest at least 65% of its total assets in the common stocks of the 63 companies that make-up the Moneypaper 63 Stock Index. The Fund's portfolio companies will also satisfy certain other favorable investment characteristics, including growth in earnings, continuous history of paying dividends, low debt ratios, and prospects for future growth.

The Advisor continually monitors the Fund's portfolio to ensure that the companies in the portfolio continue to meet the investment criteria. The Advisor's disciplined investment approach differs from certain more "actively managed" equity funds because the Advisor is not buying or selling shares of portfolio companies based on swings in economic or market conditions. The Fund, however, should not be confused with, and is not intended to be, an index fund. The Fund will follow closely the stock selections in the Moneypaper's MP 63 Stock Index. See MP 63 Stock Index, below, for a description of such Index; however, the Advisor reserves the right to make independent investment management decisions regarding the composition of the Fund's portfolio. For example, a portfolio company may cease to be listed on the MP 63 Stock Index but continue to be held by the Fund if the Advisor believes that the company meets its criteria for investment or if it would be disadvantageous to the Fund and its shareholders to sell such stock at such time. This determination may also affect the weightings of the stocks or the industries in which the Fund invests as compared with similar weightings in the Index during such time.

The Fund expects to receive cash on an ongoing basis and will be making regular investments in the companies it already holds. Initial investments were made by the Fund in proportion to the then-current holdings of the MP 63 Stock Index. On a regular basis, cash is invested, to the extent possible, evenly among the 63 companies that make up the MP 63 Stock Index. This process results in a strategy similar to that of dollar-cost averaging. By utilizing this strategy when investing additional funds for its shareholders and by minimizing portfolio turnover, the Advisor believes that the Fund will maximize accumulation, thereby compounding its value. Dividends will be reinvested in the companies that paid them.

The Advisor believes that strategy to invest equal dollar amounts in each company will enable the Fund to achieve its investment objective. Each company is allocated an equal amount of the total to be invested (except for those amounts received as dividends, which will be reinvested in the companies that pay them out). The Advisor rounds up the number, or rounds down the number of shares to purchase whole shares on a cost-efficient basis. The difference between the allocation and the amount we actually purchase is carried over to the next investment, but remains allocated to that company in particular.

 

MP 63 STOCK INDEX

The MP 63 Stock Index was created by the editors of The Moneypaper (a monthly investment newsletter) at the start of 1994 in order to track a representative sampling of companies that offer direct investment plans ("DRIPs"). With an emphasis on quality and diversity, the Index contains companies that can easily serve as "core" holdings in any portfolio, and typify the long-term aims of the small investor who uses DRIPs to build wealth. The result is a mixture of industrial companies, utilities, and transportation firms, and runs the gamut from pharmaceuticals to retailers. Included are blue-chip companies, banks, food companies, and other companies that should do well over the long term.

The MP 63 Index was equally weighted at inception (1/1/94) among companies, regardless of their size, and basically follows the fate of $100 investments in each company, with dividends reinvested, individually and in the aggregate. Each company has its own "index," regardless of price level or stock-split history, and the overall index is the aggregate performance of all stocks. When an individual company has a reading of 200, it has doubled the value of its initial investment, which was made at the start of 1994, turning $100 into $200. When the MP 63 passed the 200 level, as it did on June 6, 1997, it meant that an initial investment of $6,300 ($100 in each company) had achieved a value of more than $12,600.

The MP 63 Index is designed to demonstrate to and encourage individual investors to achieve long-term wealth by investing in a diverse group of companies, which decreases risk, and to focus on high-quality, investor-friendly firms that offer DRIPs. By and large, the companies included require ownership of just one share to enroll in their direct investment plan. In addition, these companies either do not charge any fees or, in some cases, charge minimal fees for participating in such plans. Although the Fund may not exactly mirror the holdings of the MP 63 Stock Index, its investing philosophy, as described above, is inspired by it.

Companies are replaced in the MP 63 Fund in conjunction with changes made to the underlying MP 63 Index. The MP 63 Index is diversified across industries. Replacements are generally made only when a company adopts a high-fee DRIP or when a component is merged into or acquired by another company that is a non-DRIP company; a replacement is chosen; but if the acquirer is judged to be a suitable replacement, it may take the place of the company being acquired and the shares are converted without capital gains realization.

 

 

RISK CONSIDERATIONS
All investment securities are subject to inherent market risks and fluctuations in value due to earnings, economic and political conditions, and other factors. The Fund’s total return, like stock prices generally, will fluctuate within a wide range, so an investor could lose money over short or long periods of time. The Fund is also subject to investment-style risk, which is the chance that returns from large-capitalization dividend-paying stocks will trail returns from other stock categories, the overall stock market, or other investments. Over the past five- and ten-year periods, large-cap stocks have outperformed the market in general and a similar period of under-performance is possible.

In addition, investors should be aware that the Fund has a limited operating history and that the Advisor has limited experience in acting as an investment Advisor to a mutual fund.

PORTFOLIO TURNOVER
Portfolio turnover generally involves some expense, including brokerage commissions or dealer markups and other transaction costs on the sale of securities and investment in other securities. As a result of the Fund's investment policies, the Advisor believes that its portfolio turnover rate will be lower than that of most other equity mutual funds. In general, the Fund's portfolio turnover rate is expected to be less than 10%. A low portfolio turnover rate reduces the number of transactions that may also result in the realization of taxable capital gains, some or all of which may be short-term capital gains not eligible for favored tax treatment.

DIVERSIFICATION
The Fund is a "diversified" investment company under the Investment Company Act of 1940. This means that with respect to 75% of its total assets, (a) the Fund may not invest more than 5% of its total assets in the securities of any one issuer (except U.S. Government securities) and (b) the Fund may not own more than 10% of the outstanding voting securities of any one issuer. The remaining 25% of its total assets are not subject to this restriction. To the extent that the Fund invests a significant portion of its assets in the securities of a particular issuer, it will be subject to an increased risk of loss if the market value of such issuer's securities declines.

 

 

MANAGEMENT

BOARD OF DIRECTORS
The Fund's Board of Directors has the primary responsibility for overseeing the overall management of the Fund and electing its officers. The Fund's Board of Directors is composed of the following five persons: Ted S. Gladstone, President, Gladstone Development Corporation; Gloria L. Schaffer, retired since 1996, prior thereto, from 1991 to 1995, Commissioner of Consumer Protection for the State of Connecticut; Harold G. Weinreb, Consultant since 1987; prior thereto from 1966 to 1987, employed by W.R. Grace & Co.; Vita Nelson, Chief Executive Officer of The Moneypaper, Inc.; and Michael Miola, Chief Executive Officer of American Data Services, Inc.

INVESTMENT ADVISER

The Moneypaper Advisor, Inc. (the "Advisor"), 555 Theodore Fremd Ave., Suite B-103, Rye, NY 10580, has been retained under an Investment Advisory Agreement with the Fund to act as the Fund's investment Advisor subject to the authority of the Board of Directors. Vita Nelson, David Fish, and Rod Drysdale will be responsible for the overall management of the Fund's portfolio.

Ms. Nelson's first job in the financial industry was as a bond trader at Granger & Co. in New York, where she made a market in municipal bonds. She is the Chief Executive Officer of The Moneypaper, Inc., and the Editor and Publisher of four well-respected financial publications. Ms. Nelson has, among her achievements, popularized the use of direct investment plans (DRIPs). These plans accept investments from individuals directly (thereby permitting the investor to bypass brokers).

The Moneypaper’s Guide to Direct Investment Plans is the acknowledged authority on the operations of company-sponsored direct investment plans. The Guide provides eligibility criteria and plan features of more than 1,100 companies that accept direct investments. In addition, Ms. Nelson is the Editor and Publisher of The DRIP Authority, and Direct Investing, as well as The Moneypaper, which began in 1981 as a monthly guide for the self-reliant investor. Ms. Nelson graduated from Boston University with a degree in Comparative Literature.

Mr. Fish is the Executive Editor of three publications of The Moneypaper, Inc.: The Moneypaper, Direct Investing, and the DRIP Authority. He is responsible for the daily management of the MP 63 Stock Index and his responsibilities at The Moneypaper, Inc., include research, editing, and revising The Moneypaper's Guide to Direct Investment Plans. Prior to joining The Moneypaper, Inc., in 1994, Mr. Fish had been a Senior Accountant with Thom McAn Shoe Company since 1974. Mr. Fish graduated magna cum laude with a B.S. degree in Business Administration from Worcester State College, Worcester, MA (1974).

Mr. Drysdale is the President of Temper of the Times Communications, Inc., a registered broker-dealer, and an affiliate of the Advisor. From 1989 through 1998, Mr. Drysdale was employed by Citibank, N.A. in both its retail banking and brokerage services divisions. He earned a B.S. degree in Finance from the University of Vermont in 1989.

The Advisor furnishes the Fund with investment advice and supervises the Fund's management and investment programs. The Advisor provides, at its own expense, all necessary administrative services, office space, equipment, and clerical personnel for servicing the investments of the Fund. The Advisor also provides investment advisory facilities and executive and supervisory personnel for managing the investments and effecting the portfolio transactions of the Fund. In addition, the Advisor pays the salaries and fees of all officers of the Fund who are affiliated with the Advisor.

Under the Investment Advisory Agreement, the Fund pays the Advisor a monthly advisory fee equal, on an annual basis, to 0.35% of its average daily net assets. The Advisor may, from time to time, voluntarily waive a portion of its fees, and has done so for the fiscal years ended February 29, 2000 and February 28, 2001.

CODE OF ETHICS
The Fund and the Advisor have adopted a Code of Ethics that restricts personal investing practices by employees of the Advisor and its affiliates. Among other provisions, the Code of Ethics requires that employees with access to information about the purchase or sale of securities in the Fund's portfolio obtain clearance before executing personal trades. With respect to Ms. Nelson and other investment personnel, the Code of Ethics prohibits the acquisition of securities in an initial public offering, as well as of profits derived from the purchase and sale of the same security within 60 calendar days. These provisions are designed to ensure that the interests of the Fund and its shareholders come before the interests of the people who manage the Fund.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Portfolio transactions for the Fund will generally be executed with broker-dealers on an agency basis. The Advisor will be responsible for placing all orders for purchases and sales of the Fund's securities. In selecting broker-dealers, the Advisor may consider research and brokerage services furnished to the Fund, as well as to the Advisor and its affiliates. Subject to seeking the most favorable price and execution available, the Advisor may consider sales of the Fund's shares (and of those of future series of the Fund) as a factor in the selection of broker-dealers. In addition, any portfolio transactions for the Fund that are executed on an agency basis may be effected through an affiliate of the Advisor. For more information, see "Portfolio Transactions and Allocation of Brokerage" in the SAI.

FUND ADMINISTRATOR
The Fund's Administrator is American Data Services, Inc. ("ADS" or the "Administrator"), which has its principal office at The Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, NY 11788, and is primarily in the business of providing administrative, fund accounting, and stock transfer services to retail and institutional mutual funds. Pursuant to an Administrative Service Agreement with the Fund, the Administrator provides all administrative, transfer agency, and fund accounting services necessary for the Fund, subject to the supervision of the Board of Directors.

For the services rendered to the Fund by the Administrator, the Fund pays the Administrator a monthly fee, which is based on its average net assets. If the Fund's average daily net assets are: less than $75 million, the Administrator's fee is equal to 0.35% on an annual basis of its average daily net assets; between $75 million and $200 million, the Administrator's fee is equal to 0.30% of such assets; between $200 million and $500 million, the Administrator's fee is equal to 0.25% of such assets; between $500 million and $1 billion, the Administrator's fee is equal to 0.20% of such assets; and in excess of $1 billion, the Administrator receives a fee equal to 0.10% of the Fund's average daily net assets. The Fund also reimburses the Administrator for printing, postage, and telephone costs.

TERMINATION
Both the Investment Advisory Agreement and the Administrative Service Agreement are terminable by the Board of Directors of the Fund, the Advisor, or the Administrator, on sixty (60) days' written notice. The Investment Advisory Agreement will terminate automatically in the event of its "assignment" as defined in the Investment Company Act. The Administrative Service Agreement, however, may be assigned, provided the nonassigning party has given prior written consent. Each Agreement shall remain in effect for two years from the date of its initial approval, and subject to annual approval of the Board of Directors for one-year periods thereafter. Absent willful misfeasance, bad faith, gross negligence on the part of the Advisor or willful misuse, bad faith or negligence on the part of the Administrator, or reckless disregard of its obligations thereunder, the Advisor or the Administrator shall not be liable for any action or failure to act in accordance with its duties thereunder.

DISTRIBUTOR

The Fund is self-distributed.

The Advisor and/or the Administrator may, out of their own assets, pay for certain expenses incurred in connection with the distribution of Fund shares. In particular, either or both entities may make payments out of their own assets to sales representatives and broker-dealers in connection with sales of Fund shares.

 

HOW TO PURCHASE SHARES

GENERAL PURCHASE INFORMATION
The minimum initial investment in the Fund is $1,000. The Fund may waive or reduce the minimum for certain retirement and employee savings plans or custodial accounts for the benefit of minors. The Fund's shares may be purchased at their net asset value from the Distributor, from other broker-dealers that are members of the NASD, and from certain financial institutions that have entered into selling agreements with the Distributor.

When orders are placed for shares of the Fund, the public offering price used for the purchase will be the net asset value per share next determined. The Fund's net asset value is determined at 4:15 on each business day. If an order is placed with a broker-dealer or other financial institution, the broker-dealer or other financial institution is responsible for promptly transmitting the order to the Fund's Transfer Agent/Administrator.

Shares of the Fund may be purchased by opening an account either by mail, by phone or, to the extent available and permitted by applicable law, by use of the Internet. Shares are deemed to be purchased as of the time of determination of the Fund's net asset value on the day the purchase order for the purchase of its shares is received in good form by the Fund or the Administrator. Investors may make systematic investments of fixed amounts automatically on a monthly or quarterly basis through the Fund's Automatic Investment Plan. Additional information is available from the Fund's Transfer Agent/Administrator.

PURCHASES BY TELEPHONE
To open an account by telephone, you must first call 1-877-MP63FUN (676-3386) to obtain an account number and instructions. Information concerning the account will be taken over the phone. Subject to acceptance by the Administrator, shares of the Fund may be purchased by wiring immediately available federal funds (subject to the minimum investment) to Firstar Corp. from your bank, which may charge a fee for doing so (see instructions below). You should provide your bank with the following information for the purpose of wiring your investment:

Firstar Corp. Cinti/Trust

Omaha, NE

ABA# 104000016

Account # 11287485

Shareholder Acct. No._________________________________

Shareholder Acct. Name_______________________________

You must mail a signed application to the Fund's Transfer Agent/Administrator at the address listed below in order to complete your initial wire purchase. Wire orders will be accepted only on a day on which the Fund, the Custodian, and the Transfer Agent are open for business. A wire purchase will not be considered completed until the wired money is received by the Fund's custodian bank. Any delays in wiring money, including delays that may occur in processing by the banks, are not the responsibility of the Fund or of the Transfer Agent/ Administrator. At present, there is no fee for the receipt of wired funds, but the Fund reserves the right to charge shareholders for this service.

PURCHASES BY MAIL
Subject to acceptance by the Fund's Administrator, an account may be opened by completing and signing an account application and mailing it, together with a check (subject to the Fund's minimum investment of $1,000) payable to:

MP 63 Fund
c/o Orbitex Data Services, Inc.
P.O. Box 542007
Omaha, NE 68154-1952

Payment received by mail for the purchase of shares will be credited to a shareholder's account at the net asset value per share next determined after receipt. In the event that there are insufficient funds to cover a check, the shareholder or prospective investor will be assessed a $15.00 charge.

ADDITIONAL INVESTMENTS
Additional investments may be made at any time (subject to the minimum subsequent investment of $100; $50 for purchases made using the Fund's Automatic Investment Plan) by purchasing shares of the Fund at net asset value. This may be done by mailing a check to the Fund at the address noted under "Purchases by Mail" or by wiring monies to the custodian bank, as outlined above, from a bank or financial institution with which the shareholder has an account and which is a member of the Federal Reserve System, with instructions to transmit federal funds by wire to the Fund.

OTHER PURCHASE INFORMATION
Investors should be aware that the Fund's account application contains provisions that exclude the Transfer Agent, the Distributor, and certain of the Distributor's affiliates from certain liabilities (including, among others, losses resulting from unauthorized shareholder transactions) relating to the various services (for example, telephone exchanges) made available to investors.

The Fund must receive an order and payment by the close of business for the purchase to be effective. If funds are received after the close of business (4:00 p.m.), the purchase will become effective on the next business day.

All purchases of the Fund's shares will be made in full and fractional shares calculated to three decimal places. The Fund will not issue stock certificates evidencing ownership of Fund shares.

 

HOW TO REDEEM SHARES

GENERAL REDEMPTION INFORMATION
You may redeem all or a portion of your shares on any day that the Fund values its shares (please refer to "Valuation of Shares" below for more information). Your shares will be redeemed at the net asset value next determined after receipt of your instructions in good form as explained below. The Fund's net asset value will fluctuate on a daily basis. The value of shares redeemed may be more or less than the purchase price, depending on the market value of the investment securities held by the Fund.

If authorized in the account application, you may contact the Transfer Agent by telephone with an oral request or send a written request. This request should contain: the dollar amount or number of shares to be redeemed, your Fund account number, and either a Social Security or tax identification number (as applicable). You should sign your request in exactly the same way the account is registered. If there is more than one owner of the shares, all owners must sign.

SIGNATURE GUARANTEES
No signature guarantee is required for redemptions in an amount less than $2,500 or when the redemption amount is to be sent to a shareholder directly. To protect shareholder accounts, the Fund, and its Transfer Agent from fraud, signature guarantees are required to enable the Fund to verify the identity of the person who has authorized a redemption from an account when (1) the proceeds are to be sent to someone other than to the registered shareholder(s) at the registered address, and/or (2) shares are requested to be transferred to another individual or entity other than the shareholder. Signature guarantees may be obtained from certain eligible financial institutions, including, but not limited to, the following: banks, trust companies, credit unions, securities brokers and dealers, savings and loan associations, and participants in the Securities Transfer Association Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), or the New York Stock Exchange Medallion Signature Program ("MSP"). Shareholders may contact the Fund at 1-877-MP63FUN (676-3386) for further details.

BY MAIL
The Fund will redeem its shares at the net asset value next determined after the request is received in "good order." The net asset value per share of the Fund is determined as of 4:15 p.m., New York time, on each day that the New York Stock Exchange, Inc. (the "NYSE"), the Fund, and the Transfer Agent/Administrator are open for business. Requests should be addressed to: MP 63 Fund, c/o Orbitex Data Services, Inc., P.O. Box 542007, Omaha, NE 68154-1952. Requests in "good order" must include the following documentation:

BY TELEPHONE
Provided the Telephone Redemption Option has been authorized in the application, a redemption of shares may be requested by calling the Fund's Transfer Agent at 1-877-MP63FUN (676-3386) and requesting that the redemption proceeds be mailed to the primary registration address or wired per the authorized instructions. If the Telephone Redemption Option is authorized, the Fund and its Transfer Agent may act on telephone instructions from any person representing himself or herself to be a shareholder and believed by the Fund or its Transfer Agent to be genuine.

The Transfer Agent's records of such telephone instructions are binding and each shareholder, and not the Fund or its Transfer Agent, bears the risk of loss in the event of unauthorized instructions reasonably believed by the Fund or its Transfer Agent to be genuine. The Fund will employ reasonable procedures to confirm that instructions communicated are genuine and, if it does not, it may be liable for any losses due to unauthorized or fraudulent instructions. The procedures employed by the Fund in connection with transactions initiated by telephone may include tape recording of telephone instructions and requiring some form of personal identification information prior to acting upon instructions received by telephone.

PAYMENT OF REDEMPTION PROCEEDS
After your shares have been redeemed, proceeds will be paid within three business days. In no event will payment be made more than seven days after receipt of your order in good form, except that payment may be postponed or the right of redemption suspended for more than seven days under unusual circumstances, such as when trading is not taking place on the NYSE. Payment of redemption proceeds may also be delayed if the shares to be redeemed were recently purchased by a check drawn on a bank that is not a member of the Federal Reserve System, or until such check has cleared the banking system (normally up to 15 days from the purchase date).

REDEMPTION FEE
The Fund is designed for long-term investors. It is not designed for short-term traders whose frequent purchases and redemptions can generate substantial cash flow. These cash flows can unnecessarily disrupt the Fund's investment program. Short-term traders often redeem when the market is most turbulent, thereby forcing the sale of underlying securities held by the Fund at the worst possible time as far as long-term investors are concerned. Additionally, short-term trading drives up the Fund's transaction costs as measured by both commissions and bid/ask spreads, which are borne by the remaining long-term investors. Moreover, short-term sales have tax consequences that would be borne by the remaining shareholders. For these reasons, the Fund assesses a 2% fee on the redemption of shares held for less than three years. This fee is reduced to 1% for shares held for more than three years but less than five years, and no fee is charged for shares held for more than five years. Redemption fees will be paid to the Fund to help offset transaction costs.

The fee does not apply to any shares purchased through reinvested distributions (dividends and capital gains) or to shares held in retirement plans (such as 401(k), 403(b), 457, Keogh, profit-sharing plans, and money purchase pension plans). This fee also does not apply to shares held in IRA accounts.

To calculate redemption fees, the Fund will use the first-in, first-out (FIFO) method to determine the holding period. Under this method, the date of the redemption will be compared with the earliest purchase date of shares held in the account. If this holding period is less than five years, a redemption fee will be assessed. In determining the "five year" or "three year" provision, the Fund will use the anniversary date of a transaction. Thus, for example, shares purchased on January 1, 1999, will be subject to a 2% fee if they are redeemed on or prior to December 31, 2001. Shares redeemed on or after January 1, 2004, will not be subject to any redemption fee. In the event of a partial redemption, shares will be redeemed on a first-in/first- out basis, that is, the earliest purchased shares will be deemed to be redeemed first.

INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem your account at any time the net asset value of the account falls below $500 as the result of a redemption request. You will be notified in writing prior to any such redemption and will be allowed 30 days in which to make additional investments before the redemption is processed.

 

SHAREHOLDER SERVICES

The Fund offers several service options to make your account easier to manage. These are listed on the account application. Please make note of these options and elect the ones that are appropriate for you.

AUTOMATIC INVESTMENT PROGRAM
You can automatically transfer $50 or more per month from your bank, savings and loan, or other financial institution to purchase additional shares. Contact the Transfer Agent/Administrator by calling 1-877-MP63FUN (676-3386) to obtain authorization forms or for additional information.

TELEPHONE TRANSACTION PRIVILEGES
Shareholders purchasing shares directly from the Fund will hold their shares with the Fund's Transfer Agent. You may authorize telephone redemption transaction privileges by selecting that option on the application form. It may be difficult to reach the Fund by telephone during periods when market or economic conditions foster an unusually large volume of telephone requests. Although the Advisor believes that this would not be an advantageous time at which to redeem your shares, you may still elect to do so. If you cannot reach the Fund by telephone, you should issue written instructions to the Transfer Agent at P.O. Box 542007, Omaha, NE 68154-1952. The Fund reserves the right to suspend or terminate its telephone services at any time without notice.

TAX-QUALIFIED RETIREMENT PLANS

The Fund is available for your tax-deferred retirement plan.

CONFIRMATION OF TRANSACTIONS AND REPORTING OF OTHER INFORMATION
The Transfer Agent/Administrator, on behalf of the Fund, will send you confirmations of all of your purchases or redemptions of Fund shares. If there is no activity in your Fund account, you will receive account statements on a quarterly basis. In addition, you will receive various IRS forms after the first of each year detailing important tax information, and the Fund is required to supply annual and semi annual reports that list securities held by the Fund and include its then-current financial statements.

 

DIVIDENDS AND DISTRIBUTIONS

The Fund will distribute its net ivestment income, if any, and net realized capital gains, if any, annually. Distributions from capital gains are made after applying any available capital losses and/or capital loss carryovers.

Although the Fund's Advisor believes that accumulating shares through the reinvestment of all dividends and capital gains distributions contributes to the success of this investment strategy and suggests that shareholders reinvest all distributions in additional Fund shares, by law the Fund must allow you to choose from among the following three options:

You can change your distribution option by notifying the Fund in writing. If you do not select an option when you open your account, all distributions will be reinvested in additional shares. You will receive a statement confirming the reinvestment of distributions in additional shares promptly following the end of each calendar year.

If a check representing a distribution is not cashed within a specified period (generally three months), the Transfer Agent will notify you that you have the option either of requesting another check or of reinvesting the distribution in the Fund. If the Transfer Agent does not receive your election, the distribution will be reinvested in the Fund at the then Net Asset Value. Similarly, if correspondence sent by the Fund or the Transfer Agent is returned as "undeliverable," all Fund distributions will automatically be reinvested in the Fund. Be sure to send the Transfer Agent notification of any change of address.

 

VALUATION OF SHARES

The Fund computes its net asset value (or price per share) on each day the NYSE is open for business. The calculation is made as of the regular close of the Exchange (currently 4:15 p.m., New York time).

Portfolio securities for which market quotations are readily available are valued at market value. Portfolio securities for which market quotations are not considered readily available are valued at fair value on the basis of valuations furnished by a pricing service approved by the Board of Directors. The pricing service determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities that are generally recognized by institutional traders.

Short-term investments held by the Fund that mature in 60 days or less are valued at amortized cost, which approximates market value. All other securities and assets are valued at their fair value following procedures approved by the Board of Directors.

 

TAX STATUS

Distributions of income by the Fund are generally taxable to shareholders as ordinary income. Certain Fund distributions may be considered as short- or long-term capital gain. Capital gains may be taxable at different rates depending on the length of time that the Fund holds its assets. Interest income from direct investment by noncorporate taxpayers in U.S. Government obligations (but not repurchase agreements) generally is not subject to state taxation. However, some states may tax mutual fund dividends attributable to such income. The Transfer Agent will send a notice to each shareholder (Form 1099 or 1099 substitute) advising the shareholder of any taxable income or capital gains distributed by the Fund for each taxable year.

A sale of Fund shares is a taxable event that may result in a capital gain or loss. To the extent that redemption requests result in sales of shares of the Fund's portfolio securities, remaining shareholders may be subject to capital gains or losses.

For a more detailed discussion of the federal income tax consequences of investing in shares of the Fund, see "Taxation" in the SAI. Before investing in this Fund, you should consult your tax Advisor regarding the consequences of your local and state tax laws.

 

PERFORMANCE COMPARISONS

Advertisements and other sales literature may refer to the Fund's total return. The total return for the one-, five- and 10-year periods (or for the life of the Fund until the Fund is in existence for such longer periods) through the most recent calendar quarter represents the average annual compounded rate of return on an investment of $1,000 in the Fund at the public offering price, plus any applicable sales load. Total return may also be presented for other periods.

All data are based on past investment results and do not predict future performance. Investment performance, which will vary, is based on many factors, including market conditions, portfolio composition, and Fund operating expenses. Investment performance also often reflects the risks associated with the Fund's investment objective and policies. These factors should be considered when comparing the Fund's investment results with those of other mutual funds and other investment vehicles. Fund performance may be compared with that of various indexes.

For additional information regarding comparative performance information and the calculation of total return, see "Performance Comparisons" in the SAI.

 

FINANCIAL HIGHLIGHTS

THE MP 63 FUND, INC. (For a share outstanding throughout each period)	For the Year Ended February 28, 2001	For the Year Ended February 29, 2000
Net asset value, beginning of period	$8.81	$10.00
Income (loss) from investment operations:
Net investment income (loss) Net realized and unrealized gain (loss) On investments Total from investment operations	0.07 1.10 1.17	0.08 (1.21) (1.13)
Less distributions:
Dividends from net investment income Distributions from net realized gains Total dividends and distributions Net asset value, end of period Total return *	(0.08) 0.00 (0.08) $9.90 13.26%	(0.04) (0.02) (0.06) $ 8.81 (11.36)%
Ratios/Supplemental data Net assets, end of year (in thousands)	$15,205	$12,374
Ratios to Average Net Assets:
Expenses (before reimbursement) Expenses (net of reimbursement) Net investment income (before reimbursement) Net investment income (net of reimbursement) Portfolio Turnover Rate	1.44% 1.25% 0.51% 0.70% 9.17%	1.81% 1.15% 0.20% 0.86% 0.97%
* Non-Annualized

 

PRIVACY STATEMENT

At the MP 63 Fund, we recognize and respect the privacy of each of our investors and their expectations for confidentiality. The protection of investor information is of fundamental importance in our operation and we take seriously our responsibility to protect personal information.

We collect, retain and use information that assists us in providing the best service possible. This information comes from the following sources:

We only disclose personal nonpublic information to third parties as necessary and as permitted by law.

We restrict access to personal nonpublic information to employees, affiliates and service providers involved in servicing your account. We require that these entities limit the use of the information provided to the purposes for which it was disclosed and as permitted by law.

We maintain physical, electronic and procedural safeguards that comply with federal standards to guard nonpublic personal information of our investors.

 

 

COUNSEL AND INDEPENDENT AUDITORS

Legal matters in connection with the issuance of shares of common stock of the Fund are passed upon by Satterlee Stephens Burke & Burke LLP, 230 Park Avenue, New York, NY 10169. Mendlowitz Weitsen, LLP, 646 Highway 18, Brunswick, NJ 08816 have been selected as independent accountants for the Fund.

A Statement of Additional Information ("SAI") containing additional information about the Fund, dated June 30, 2000, is available free of charge. Additional information about the Fund's investments is available in the Fund's Annual and Semi-Annual Reports to Shareholders. An SAI and/or the Annual and Semi-Annual Reports will be sent to any investor within three (3) business days of the Fund's receipt of a request for one. The address of the Fund is The Hauppauge Corporate Center, 150 Motor Parkway, Suite 109W, Hauppauge, NY 11788 and its telephone number for shareholder inquiries and to request copies of the SAI or the Fund's Annual and Semi-Annual Reports is 1-877-MP63FUN (676-3386). Furthermore, information about the Fund, including the SAI can be reviewed and copied at the Commission's Public Reference Room in Washington, D.C. and information on the operation of the Commission's Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. Reports and other information about the Fund are also available on the EDGAR database or on the Commission's Internet site at http://www.sec.gov Copies of this information may be obtained, upon payment of a duplicating fee by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section of the Commission, Washington, D.C. 20549-0102. The SAI has been filed with the Securities and Exchange Commission and is incorporated in its entirety by reference in this Prospectus.

(INVESTMENT COMPANY ACT FILE NO. 811-09053)

 

 

 

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THE MP 63 FUND, INC.
NEW ACCOUNT APPLICATION

This form can be used for individual accounts, joint accounts, transfers/gifts to minors, trust accounts, and for certain tax-deferred accounts, such as Keogh, profit-sharing plans, pension and IRAs held at another trustee or custodian.
Call for an IRA or ROTH IRA application, or, for help with this application, 1-877-MP 63FUN (1-877-676-3386).

Mail to: The MP 63 Fund, Inc., c/o Orbitex Data Services, Inc., P.O. Box 542007, Omaha, NE 68154-1952

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ACCOUNT REGISTRATION

(For Individual or Joint Owners)

First Name:

Middle Name:

Last Name:

Social Security Number:

Join Owner:

Social Security Number:

Registration will be "Joint Tenants with Right of Survivorship" unless otherwise specified:

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(For Uniform Transfers/Gifts To Minors Act Accounts)

Custodian's Name (only one allowed):

Minor’s Name (only one allowed):

Minor’s Social Security Number:

State of Residence:

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(For Corporate Trust or Other Fiduciary Accounts)

Name of Corporation, Trust, etc.:

Name and Date of Trust (continued):

Name(s) of Trustee(s), Beneficiary, etc.:

Tax ID Number:

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ADDRESS FOR MAILINGS

Number and Street:

Apartment, Floor or Room Number:

Telephone No. (include area code):

City, State, Zip:

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INITIAL INVESTMENT Enter Amount ($1,000 Minimum) $ ____________

We recommend an initial investment of at least $2,000 because the Fund charges an annual account maintenance fee of $10 on accounts with balances below $2,000. (This fee is waived, however, if your account balance totals $2,000 by the end of the year.)

The minimum initial investment is reduced to $500 if you use an automatic Investment Plan (see other side of form).

By Check, Please make check payable to the MP 63 Fund and mail to the address above.
By wire or overnight courier please call 1-877-MP63FUN (676-3386) for instructions.

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DISTRIBUTIONS

_____  U.S. Citizen
_____  Other: _________________________________   (Country of Residence)

Dividends and distributions will be reinvested unless a box is checked indicating otherwise:
_____  Dividends and capital gain reinvested
_____  Dividends in cash; capital gain distributions reinvested
_____  Dividends and capital gain distributions in cash

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AUTOMATIC INVESTMENT (optional)

_____  Each month, I/we would like to have American Data Services draw an Automatic Clearing House (ACH) debit electronically against the account of my Financial Institution listed below, to purchase shares of THE MP 63 FUND, INC.

I/we understand that the shares of the Fund are purchased on the day of the debit. I also understand that if the automatic purchase can not be made due to insufficient funds or stop payment, a $15.00 fee will be assessed.

Mark one of your personal checks "VOID" and attach the voided check to this application, or fill in the information below. As soon as your Financial Institution accepts your authorization, debits will be generated and purchases of Fund shares will begin.Please note that your Financial Institution must be able to accept ACH transactions. Please allow one month for processing of this Automatic Investment Plan option before the first debit occurs.

Please begin Automatic Investing for me and invest $ ____________  ($50 minimum) in shares of the Fund on the: _____   10^th   _____   20^th of each month, or first business day thereafter.

Name of my Financial Institution:

Address of my Financial Institution:

My Financial Institution's ABA Number:

My Account Number:

Name(s) on Account:

I understand that my ACH debit will be dated each month on the day specified above. I agree that if such debit is not honored upon presentation, American Data Services may discontinue this service, and any purchase of Fund shares may be reversed. I further understand that the net asset value of the shares of the Fund at the time of such reversal may be less than the net asset value on the day of the original purchase. American Data Services is authorized to redeem sufficient additional full and fractional shares from my account to make up the deficiency. The Automatic Investment Plan may be discontinued by American Data Services upon 30 days written notice or by the investor by written notice to American Data Services provided the notice is received no later than 5 business days prior to the specified investment date.

Signature of Depositor:

Signature of Co-Depositor (required for joint accounts):

Date:

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REDEMPTIONS BY TELEPHONE (Optional)

_____  I would like to be able to place a redemption order by telephone and have the proceeds mailed to me or wired directly to my Financial Institution account listed below. I understand that these procedures are offered as a convenience to me, and I agree that neither the Fund nor American Data Services will be liable for any loss, expense, or cost arising from one of these transactions. If you choose to have redemption proceeds wired to your account (you will be charged an $8.00 processing fee for each wire you request), please fill in the following information:

Name of my Financial Institution:

Address of my Financial Institution:

My Financial Institution's ABA Number:

My Account Number:

Name(s) on Account:

Signature of Depositor:

Signature of Co-Depositor (required for joint accounts):

Date:

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SIGNATURES:

By signing this new account application, I/we certify under penalty of perjury that:

PLEASE SIGN BELOW: (If joint account, both owners must sign.)

Signature (Owner, Trustee or Custodian):

Signature (Joint owner or Co-Trustee) :

Date:

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HOW DID YOU HEAR ABOUT OUR FUND?

ARE YOU A SUBSCRIBER TO THE MONEYPAPER?

 

For information and assistance please call 1-877-MP63FUN (1-877-676-3386)

Mailing Address:
The MP 63 Fund, Inc.
c/o Orbitex Data Services, Inc.
P.O. Box 542007
Omaha, NE 68154-1952

By Overnight Courier:
The MP 63 Fund, Inc.
c/o Orbitex Data Services, Inc.
14707 California Street, Suite 5
Omaha, NE 68154-1952