BREAD & BUTTER FUND INC. (BABFX) Exchange: NMFQS

The Fund will adhere to a Contrarian/Value Investment Strategy which focuses on investing primarily in small, medium and large capitalization common stocks, both domestic and foreign, which are out of favor and undervalued. In addition, the Fund can invest in undervalued securities across the capital structure in investment and below investment grade corporate and government bonds, preferred stock and REITs.   The Fund is non-diversified so it generally may invest in 15 to 40 securities. We believe that the price you pay matters to your long term rate of return. We find the best values are found in securities that are out of favor due to negative sentiment and or controversy which clouds the future outlook of an industry or sector. Simply, the Contrarian Value Investment Strategy is a process with a set of checks and balances which focuses on the best values presented by the market and avoids the hot sectors or bubble stocks of the day. The Contrarian Value Investment Strategy uses a quantitative and qualitative discipline to determine if a security is an undervalued and an attractive long term investment. The first part of the process is to seek out those investments that trade at a discount to the following characteristic(s):   ·Free-cashflow/cashflow ·Book Value or replacement cost of assets ·Current as well as anticipated future levels of earnings ·Private Market Values/Franchise Value   Then the undervalued securities are put through a qualitative four step process to determine the most attractive investments. The process includes:   1.Complete Financial Statement Analysis/Financial Integrity - an in-depth analysis of the financial statements. 2.Industry Dynamics - The Adviser will analyze the current competitive landscape and fundamentals within the Industry. 3.Overall Management Strategy - The Adviser searches for high quality management teams that make prudent operating and capital allocation decisions to grow the underlying value of the business. 4.Analyst Sentiment – usually neutral to negative at the time of purchase.   Once a position is acquired, constant research and monitoring follow throughout the holding period or until the security is liquidated. We will sell a security for the following reasons: the security becomes fair to overvalued, the initial assumptions regarding a security are invalid or inaccurate and we replace the security with a more attractive one.