Cultivar ETF (CVAR) Exchange: BATS

TheFund is an actively managed exchange traded fund (“ETF”) that seeks to build a portfolio of approximately 50 to 100securities across a broad spectrum of market capitalizations and sectors. TheFund may at times take larger positions (greater than 5%) in certain holdings and/or sectors when its research and valuation modelsindicate that such investments are appropriate. As a result, the Fund will operate as a “non-diversified” fund, whichmeans it can invest in fewer securities at any one time than a diversified fund. Toachieve its investment objective, the Fund invests primarily in equity securities traded on U.S. exchanges of any size that theFund’s investment adviser, Cultivar Capital, Inc. (the “Adviser”), believes are under-valued, or under-appreciated,by other participants in the broader equity market. In selecting securities for the Fund, the Adviser screens on an ongoing basisthe Fund’s investment universe seeking such securities using an initial valuation assessment that is primarily quantitative,based on cash flow. The Adviser’s discounted cash flow model uses several key inputs to assess each security’s estimatedintrinsic value. The key inputs include a conservative annual cash flow assumption, a desired rate of return, and an average growthrate for the security as implied by the market historically. Intrinsic value is a concept that refers to what the Adviser estimatesa company is “really” worth. The Adviser generally purchases companies when they are at a 20 to 40 percent discountto their calculated intrinsic value. The securities considered in the Fund’s investment universe include common stock, depositaryreceipts traded on U.S. exchanges that represent ownership of a foreign company but offer the liquidity and ease of accessibilityprovided by a U.S. exchange, and real estate investment trusts (“REITs”). Followingthe initial quantitative process, individual securities that appear to have discounted valuations go through a multi-layered reviewwithin the Adviser’s portfolio management team, first by an Investment Sub-Committee and then the full Investment Committee,which each makes a fuller assessment of the company’s valuation and thus its future investment return prospects. This processsets a buy and sell target for each security. The buy target price will be set at some discount to the assessed intrinsic valuefor each security based on the portfolio management team’s overall analysis. In setting this discounted buy price, an assessmentis made of the security’s relative risk and uncertainty of its future cash flows. Thesell target price for a security may be at the higher end of this range because the Adviser expects the calculated quantitativevalue of such companies to move higher as more current financial information becomes available. Conversely, the sell target pricefor a security may be set to the lower end of the quantitative fair value range because it is deemed more volatile, less certainin its financial outcome, or was purchased at a more significant discount initially, all of which might call for an earlier exitupon reaching a reasonable rate of return on the security. Oncethe buy and sell target prices are set on securities by the portfolio management team, they are monitored on an ongoing basisand inform the individual security acquisition and divestiture process. The Adviser will seek to identify for the Fund’sportfolio a broad group of securities with sufficient discounted valuation to offer good upside appreciation potential and/ordividend yield. The above process outlines the core of the bottom-up portion of the Adviser’s process. Considerationis also given by the Adviser to top-down, macro valuation factors, including sector diversification. The Adviser maintains severalfundamental market valuation metrics and investment sentiment metrics that it looks to in order to make its assessment of theoverall macro outlook for equity markets. If the Adviser deems there to be broader risk of a market downturn, then it may overweightsectors or securities it deems to be less exposed to such risk, including maintaining additional cash or cash equivalents. Alternatively,if the Adviser feels the equity market is discounted at the macro level, then it may increase exposure to areas expected to reboundmore quickly and would likely hold less cash and cash equivalents. Inaddition to the above macro assessment, the Adviser will seek to invest in various sectors when building the Fund’s portfolioand endeavor to maintain exposure to multiple sectors during most market environments. However, the Fund may over or under weightparticular sectors or securities depending on the Adviser’s assessment of valuation of the overall market at a particularpoint in time based on its broad macro market analysis discussed above. Generally,the Adviser expects to exercise patience in its decision to add or exit individual security positions. The Adviser will add toan individual position when it declines within range of the Adviser’s desired discounted valuation. Once an individual positionis in the portfolio, the Adviser anticipates holding the position until it appreciates to its desired sell target, which is groundedin its quantitative analysis and investment committee decision-making process. In most instances, the appreciation of an individualposition to its sell target can take some time to occur as market participants recognize, over time, the under-valued nature ofthe position and drive up its price. Therefore, the Adviser anticipates that the portfolio will have fairly low to moderate turnoverin its individual positions. Insummary, the Adviser’s investment approach is a blend of both bottom-up and top-down analysis: the bottom-up approach informsthe individual security selection, while top-down factors guide the sector tilts and the potential need to retain additional cashor cash equivalents.