Northern Lights Fund Trust III PRE 14A, filed Aug 4, 2021
Northern Lights Fund Trust III (CPAI)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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| ý | Preliminary Proxy Statement |
| o | Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)) |
| o | Definitive Proxy Statement |
| o | Definitive Additional Materials |
| o | Soliciting Material Pursuant to §240.14a-12 |
Northern Lights Fund Trust III
(Name of Registrant as Specified in Its Charter)
Not Applicable
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| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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Pinnacle TrendRating Innovative Equity Fund
a series of
Northern Lights Fund Trust III
with its principal offices at
225 Pictoria Drive, Suite 450
Cincinnati, OH 45256
[DATE], 2021
Dear Shareholder,
I am writing to let you know that a special meeting of the shareholders of the Pinnacle TrendRating Innovative Equity Fund (the “Fund”) a series of Northern Lights Fund Trust III ( the “Trust”), will be held on [MEETING DATE], 2021, at 10:00 A.M., Eastern time, at the offices of the Trust’s counsel, Thompson Hine LLP, 41 S. High Street, Suite 1700, Columbus, OH 43215 (the “Meeting”). The purpose of the Meeting is to vote on a proposal to eliminate the Fund’s fundamental investment restriction regarding diversification of investments, so that the Fund may operate as a “non-diversified” investment company (the “Non-Diversification Proposal”).
If you were a shareholder of record of the Fund as of the regular close of business of the New York Stock Exchange on [DATE], 2021, you have the opportunity to vote on the proposal. This package contains notice of the Meeting, information about the proposal and the materials to use when casting your vote. If the Fund’s shareholders vote to approve the proposal, the elimination of the fundamental investment restriction regarding diversification of investment will be implemented within a short period of time following such shareholder approval.
At a special meeting of the Board of Trustees of the Trust (the “Board”) on June 17, 2021, at the recommendation of the adviser to the Fund, Pinnacle Family Advisors LLC (the “Adviser”), the Board approved a revision to the Fund’s investment strategy so that it would use signals from W.E. Sherman & Co. to determine the Fund’s equity and cash allocations (the “Revised Investment Strategy”). As part of the Revised Investment Strategy, half of the Fund will be comprised of 7 stocks from the S&P 500 Index, and the other half of the portfolio will be comprised 15 stocks from those companies that are on the Russell 1000 Index without being on the S&P 500 Index.
Currently, the Fund is classified as a “diversified” investment company and, therefore, is not permitted to limit the number of its stock holdings sufficiently to implement the Revised Investment Strategy. At the Board’s meeting on June 17, 2021, the Adviser proposed, and the Board approved, a proposal to implement the Revised Investment Strategy and to change the Fund’s classification to a non-diversified investment company. The change of the Fund’s classification to a non-diversified investment company requires approval of the Fund’s shareholders, as described in more detail in the accompanying proxy statement. In connection with the Revised Investment Strategy, the Board approved changing the name of the Fund to “Pinnacle Sherman Breakaway Strategy Fund.”
Please read the enclosed materials carefully and cast your vote on the Proxy Card. Please vote your shares promptly. Your vote is extremely important, no matter how large or small your holdings may be. If you have any questions before you vote, please call Northern Lights Trust Fund III toll-free at 1-888-985-9830. Thank you for your participation in this important initiative.
Sincerely,
__________________________________
Richard A. Malinowski
President, Northern Lights Trust Fund III
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Pinnacle TrendRating Innovative Equity Fund
a series of
Northern Lights Fund Trust III
225 Pictoria Drive, Suite 450
Cincinnati, OH 45256
1-888-985-9830
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held [MEETING DATE], 2021
Dear Shareholders:
The Board of Trustees of the Northern Lights Fund Trust III, an open-end management investment company organized as a Delaware statutory trust, has called a special meeting of the shareholders of Pinnacle TrendRating Innovative Equity Fund, to be held at the offices of the Trust’s counsel, Thompson Hine LLP, 41 S. High Street, Suite 1700, Columbus, OH 43215 on [MEETING DATE], 2021 at 10:00 a.m., Eastern time, for the following purposes:
| 1. | To approve a change in the Fund’s classification from a diversified investment company to a non-diversified investment company. |
| 2. | To transact such other business as may properly come before the meeting or any adjournments or postponements thereof. |
Shareholders of record at the close of business on [RECORD DATE], 2021 are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements thereof. The Notice of Meeting, Proxy Statement, and accompanying form of proxy will be mailed to shareholders on or about [MAILING DATE], 2021.
The Board of Trustees of the Trust, consisting entirely of Independent Trustees, recommends that shareholders of the Fund vote “FOR” approval of the proposal.
By Order of the Board of Trustees
__________________________________
Richard Malinowski
President, Northern Lights Trust Fund III
[MAILING DATE], 2021
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON [MEETING DATE], 2021
A copy of the Notice of Shareholder Meeting, the Proxy Statement and Proxy Voting Ballot
are available at www.proxyonline.com/docs/[INSERT].pdf.
YOUR VOTE IS IMPORTANT
To assure your representation at the meeting, please complete the enclosed proxy and return it promptly in the accompanying envelope or by calling the number listed on your proxy card whether or not you expect to be present at the meeting. If you attend the meeting, you may revoke your proxy and vote your shares in person.
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Pinnacle TrendRating Innovative Equity Fund
a series of
Northern Lights Fund Trust III
with its principal offices at
225 Pictoria Drive, Suite 450
Cincinnati, OH 45256
____________
PROXY STATEMENT
____________
SPECIAL MEETING OF SHAREHOLDERS
To Be Held [MEETING DATE], 2021
____________
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Trustees (the “Board”) of the Northern Lights Fund Trust III (the “Trust”) on behalf of Pinnacle TrendRating Innovative Equity Fund (the “Fund”), for use at a Special Meeting of Shareholders of the Trust (the “Meeting”) to be held at the offices of the Trust’s counsel, Thompson Hine LLP, 41 S. High Street, Suite 1700, Columbus, OH 43215 on [MEETING DATE], 2021 at 10:00 a.m. Eastern time, and at any and all adjournments thereof. The Notice of Meeting, Proxy Statement, and accompanying form of proxy will be mailed to shareholders on or about [MAILING DATE], 2021.
The Meeting has been called by the Board for the following purposes:
| 1. | To approve a change in the Fund’s classification from a diversified investment company to a non-diversified investment company. |
| 2. | To transact such other business as may properly come before the meeting or any adjournments or postponements thereof. |
Only shareholders of record at the close of business on [RECORD DATE], 2021 (the “Record Date”) are entitled to notice of, and to vote at, the Meeting and any adjournments or postponements thereof.
A copy of the Fund’s most recent annual report, including financial statements and schedules, is available at no charge by visiting www.pinnacledynamicfunds.com, sending a written request to the Fund, 225 Pictoria Drive, Suite 450, Cincinnati, OH 45256 or by calling 1-888-985-9830.
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PROPOSAL
APPROVAL OF A CHANGE IN THE FUND’S DIVERSIFICATION POLICY
| Existing Policy | Proposed Policy |
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The Fund is a diversified investment company.
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The Fund is a non-diversified investment company. |
In this proposal, shareholders of the Fund are being asked to amend the diversification policy of the Fund to reflect that the Fund is a non-diversified investment company (the “Non-Diversification Proposal”).
A “diversified company,” under section 5(b)(1) of the Investment Company Act of 1940 (“1940 Act’), refers to a diversified fund as one with the following characteristics: (i) at least 75% of the fund’s total assets is represented by cash, government securities, securities of other investment companies, and other securities limited in respect of any one issuer to an amount not greater than (a) five percent of the total value of the fund and (b) 10 percent of the outstanding voting securities of such issuer. By contrast, a “non-diversified company” refers to funds that are not “diversified companies.”
Historically, the Fund identified itself in its registration statement as a diversified company. The Trust is seeking shareholder approval to change the Fund’s diversification policy from “diversified” to “non-diversified”. The Fund’s adviser and the Board believe that the change to the diversification policy is in the best interests of shareholders because it would facilitate the transition to the Fund’s new investment strategy.
As a non-diversified company, the Fund will not be subject to the constraints of a diversified company. This means, for example, that the Fund will be able to invest more of its assets in positions of more than 5% of its total assets in the securities of one or more issuers or hold more than 10% of the outstanding voting securities of an issuer. Because a relatively high percentage of a non-diversified fund’s assets may be invested in the securities of a limited number of companies in the same or related economic sectors, the Fund’s portfolio may be more susceptible to any single economic, business, political or regulatory occurrence than the value of shares of a diversified fund.
This diversification policy change was approved by the Board on June 17, 2021, subject to approval by shareholders of the Fund representing a majority of the outstanding voting securities of the Fund.
The Board of Trustees of the Trust, consisting entirely of Independent Trustees, recommends that shareholders of the Fund vote “FOR” approval of the Non-Diversification Proposal.
OTHER INFORMATION
The Fund is currently a diversified series of the Northern Lights Fund Trust III, an open-end investment management company organized as a Delaware statutory trust and formed by an Agreement and Declaration of Trust on December 5, 2011. The Trust’s principal executive offices are located at 225 Pictoria Drive, Suite 450, Cincinnati, OH 45256. The Board of Trustees supervises the business activities of the Fund. Like other mutual funds, the Fund retains various organizations to perform specialized services. The Portfolio retains Pinnacle Family Advisors LLC (the “Adviser”) as investment adviser. Northern Lights Distributors, LLC, located at 4221 North 203rd Street, Suite 100, Elkhorn, NE 68022, serves as principal underwriter and distributor of the Fund. Gemini Fund Services, LLC, with principal offices located at 4221 North 203rd Street, Suite 100, Elkhorn, NE 68022, provides the Fund with transfer agent, accounting, compliance, and administrative services.
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THE PROXY
The Board solicits proxies so that each shareholder has the opportunity to vote on the proposal(s) to be considered at the Meeting. A proxy for voting your shares at the Meeting is enclosed. The shares represented by each valid proxy received in time will be voted at the meeting as specified. If no specification is made, the shares represented by a duly executed proxy will be voted to approve the Non-Diversification Proposal and, at the discretion of the holders of the proxy, on any other matter that may come before the meeting that the Trust did not have notice of a reasonable time prior to the mailing of this Proxy Statement. You may revoke your proxy at any time before it is exercised by (1) submitting a duly executed proxy bearing a later date, (2) submitting a written notice to the President of the Trust revoking the proxy, or (3) attending and voting in person at the Meeting.
VOTING SECURITIES AND VOTING
As of the Record Date, there were [INSERT NUMBER] shares of beneficial interest of the Fund issued and outstanding.
All shareholders of record of the Fund on the Record Date are entitled to vote at the Meeting on the Non-Diversification Proposal. Each shareholder is entitled to one (1) vote per share held, and fractional votes for fractional shares held, on any matter submitted to a vote at the Meeting.
An affirmative vote of the holders of a majority of the outstanding shares of the Fund is required for the approval of the proposal. As defined in the 1940 Act, a vote of the holders of a majority of the outstanding shares of the Fund means the vote of (1) 67% or more of the voting shares of the Fund present at the meeting, if the holders of more than 50% of the outstanding shares of the Fund are present in person or represented by proxy, or (2) more than 50% of the outstanding voting shares of the Fund, whichever is less.
Broker non-votes and abstentions will be considered present for purposes of determining the existence of a quorum and the number of shares of the Fund represented at the meeting, but they are not affirmative votes for any proposal. As a result, with respect to the approval of the Non-Diversification Proposal, non-votes and abstentions will have the same effect as a vote against the proposal because the required vote is a percentage of the shares present or outstanding. A signed proxy card received from a shareholder that does not specify how the shareholder’s shares should be voted on the proposal will be considered present for purposes of determining the existence of a quorum and the number of shares of the Fund represented at the meeting and will be deemed an instruction to vote such shares in favor of the proposal. An unsigned proxy card will not be considered present for purposes of determining the existence of a quorum and the number of shares of the Fund represented at the meeting, and they will not be considered an affirmative vote for any proposal.
Security Ownership of Management AND Certain Beneficial Owners
As of the Record Date, the following shareholders of record owned 5% or more of the outstanding shares of the Fund:
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Name and Address |
Shares | Percentage of Portfolio | |||||
| [TO BE COMPLETED] | |||||||
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Shareholders owning more than 25% of the outstanding shares of the Fund are considered to “control” the Fund, as that term is defined under the 1940 Act. Persons controlling the Fund may be able to determine the outcome of any proposal submitted to the shareholders for approval.
As a group, the Trustees and officers of the Trust owned less than 1% of the outstanding shares of the Fund as of the Record Date. As a result, the Trustees and officers as a group are not deemed to control the Fund.
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered for presentation at the Meeting. Under the proxy rules of the United States Securities and Exchange Commission, shareholder proposals may, under certain conditions, be included in the Trust’s Proxy Statement and proxy for a particular meeting. Under these rules, proposals submitted for inclusion in the Trust’s proxy materials must be received by the Trust within a reasonable time before the solicitation is made. The fact that the Trust receives a shareholder proposal in a timely manner does not ensure its inclusion in its proxy materials, because there are other requirements in the proxy rules relating to such inclusion. You should be aware that annual meetings of shareholders are not required as long as there is no particular requirement under the 1940 Act, which must be met by convening such a shareholder meeting. Any shareholder proposal should be sent to Eric Kane, Esq., Secretary, Northern Lights Fund Trust III, 80 Arkay Drive, Suite 110, Hauppauge, NY 11788.
COST OF SOLICITATION
The Board is making this solicitation of proxies. The Trust has engaged AST Fund Solutions, LLC(“AST”), a proxy solicitation firm, to assist in the solicitation. The estimated fees anticipated to be paid to AST are approximately $3,200. The cost of preparing and mailing this Proxy Statement, the accompanying Notice of Special Meeting and proxy and any additional materials relating to the meeting and the cost of soliciting proxies will be borne by the Adviser. In addition to solicitation by mail, the Trust will request banks, brokers and other custodial nominees and fiduciaries to supply proxy materials to the respective beneficial owners of shares of the Fund of whom they have knowledge, and the Adviser will reimburse them for their expenses in so doing. Certain officers, employees and agents of the Trust, the Adviser may solicit proxies in person or by telephone, facsimile transmission, or mail, for which they will not receive any special compensation.
OTHER MATTERS
The Board knows of no other matters to be presented at the Meeting other than as set forth above. If any other matters properly come before the meeting that the Trust did not have notice of a reasonable time prior to the mailing of this Proxy Statement, the holders of the proxy will vote the shares represented by the proxy on such matters in accordance with their best judgment, and discretionary authority to do so is included in the proxy.
PROXY DELIVERY
If you and another shareholder share the same address, the Trust may only send one Proxy Statement unless you or the other shareholder(s) request otherwise. Call or write to the Trust if you wish to receive a separate copy of the Proxy Statement, and the Trust will promptly mail a copy to you. You may also call or write to the Trust if you wish to receive a separate proxy in the future or if you are receiving multiple copies now and wish to receive a single copy in the future. For such requests, call the Trust at 1-888-985-9830, or write the Trust at 225 Pictoria Drive, Suite 450, Cincinnati, OH 45256.
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Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to be Held on [MEETING DATE], 2021
A copy of the Notice of Shareholder Meeting, the Proxy Statement, and Proxy Card are available at www.proxyonline.com/docs/[INSERT].pdf.
BY ORDER OF THE BOARD OF TRUSTEES
Eric Kane, Esq., Secretary
Dated: [MAILING DATE], 2021
If you have any questions before you vote, please call our proxy information line at [TOLL FREE NUMBER]. Representatives are available Monday through Friday 9 a.m. to 10 p.m., Eastern Time to answer your questions about the proxy material or about how to how to cast your vote. You may also receive a telephone call reminding you to vote your shares. Thank you for your participation in this important initiative.
Please date and sign the enclosed proxy and return it promptly in the enclosed reply envelope or Call the number listed on your proxy card.
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The Proxy Card for your Fund is enclosed along with the Proxy Statement.
VOTING IS QUICK AND EASY. YOUR VOTE IS IMPORTANT NO MATER HOW MANY SHARES YOU OWN.
To secure the largest possible representation at the Meeting, please vote via the Internet or by telephone, or mark, sign, and return your Proxy Card. If you sign, date and return the Proxy Card but give no voting instructions, your shares will be voted “FOR” the proposal indicated on the card. You may revoke your proxy at any time at or before the Meeting.
Please vote your shares by today.
You may vote by:
| · | Internet: you may vote over the Internet by following the instructions on the enclosed Proxy Card. |
| · | Telephone: please have the Proxy Card available, call the number on the enclosed card and follow the instructions. |
| · | Mail: sign and return the enclosed Proxy Card in the prepaid envelope provided if you have received this Combined Proxy Statement/Prospectus by mail. |
If we do not hear from you after as reasonable amount of time, you may receive a call from our proxy solicitor, AST Fund Solutions, LLC, reminding you to vote.
THE BOARD OF TRUSTEES OF NORTHERN LIGHTS TRUST FUND III RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL.
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INSTRUCTIONS FOR SIGNING PROXY CARD(S)
The following general guidelines for signing Proxy Cards may be of assistance to you and will help avoid the time and expense involved in validating your vote if you fail to sign you Proxy Card properly.
1. Individual Accounts: Sign you name exactly as it appears in the registration on the Proxy Card.
2. Joint Accounts: Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the Proxy Card.
3. All Other Accounts: The capacity of the individual signing the Proxy Card should be indicated unless it is reflected in the form of registration. For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. ABC Corp.
John Doe, Treasurer
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Partnership Accounts
(1) The XYZ Partnership Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership Jane B. Smith, General Partner
Trust Accounts
(1) ABC Trust Account Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/18/78 Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust. f/b/o John B. Smith
John B. Smith, Jr. UGMA/UTMA
(2) Estate of John B. Smith John B. Smith, Jr., Executor
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Northern Lights Fund Trust III
225 Pictoria Drive, Suite 450
Cincinnati, OH 45256
Pinnacle TrendRating Innovative Equity Fund
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD [MEETING DATE], 2021
The undersigned, revoking previous proxies, if any, with respect to the shares described below, hereby appoints Richard Malinowski and Eric Kane, each an attorney, agent, and proxy of the undersigned, with full power of substitution, to vote at the Special Meeting of Shareholders (the “Meeting”) of Northern Lights Fund Trust III (the “Trust”) to be held at offices of the Trust’s counsel, Thompson Hine LLP, 41 S. High Street, Suite 1700, Columbus, OH 43215 at [MEETING DATE], 2021 at 10:00 a.m. Eastern time, and at any and all adjournments thereof, all shares of beneficial interest of the Pinnacle TrendRating Innovative Equity Fund (the “Fund”), on the proposals set forth below and any other matters properly brought before the Meeting.
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED HEREIN BY THE SIGNING SHAREHOLDER(S). IF NO CONTRARY DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, THIS PROXY WILL BE VOTED “FOR” THE CHANGE IN THE FUND’S CLASSIFICATION TO A NON-DIVERSIFIED INVESTMENT COMPANY AND, IN THE APPOINTED PROXIES’ DISCRETION, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED. The undersigned acknowledges receipt with this Proxy Statement of the Board of Trustees. Your signature(s) on this should be exactly as your name(s) appear on this Proxy. If the shares are held jointly, each holder should sign this Proxy. Attorneys-in-fact, executors, administrators, trustees or guardians should indicate the full title and capacity in which they are signing.
_______________________________________ Signature Date
_______________________________________
Signature of Joint Shareholder Date
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FOLD HERE PLEASE DO NOT TEAR ▲
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY’S BOARD OF TRUSTEES, AND MAY BE REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY APPEARING IN PERSON AND VOTING AT THE MEETING.
TO VOTE, MARK ONE BOX IN BLUE OR BLACK INK. Example: [ ]
| FOR | AGAINST | ABSTAIN | |
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1. To approve a change in the Fund’s classification from a diversified investment company to a non-diversified investment company.
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¨ | ¨ | ¨ |
A copy of the Proxy Statement is available online at: www.proxyonline.com/docs/[INSERT].pdf
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. PLEASE SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
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