FormulaFolios Tactical Growth ETF. FormulaFolios Smart Growth ETF

Transcription

1 FrmulaFlis Tactical Grwth ETF FFTG FrmulaFlis Smart Grwth ETF FFSG PROSPECTUS Octber 23, 2017 Advised by: FrmulaFli Investments, LLC 89 Inia Avenue NW, Suite 600 Grand Rapids, MI This Prspectus prvides imprtant infrmatin abut each Fund that yu shuld knw befre investing. Please read it carefully and keep it fr future reference. These securities have nt been apprved r disapprved by the Securities and Exchange Cmmissin nr has the Securities and Exchange Cmmissin passed upn the accuracy r adequacy f this Prspectus. Any representatin t the cntrary is a criminal ffense. Shares f each Fund are listed and traded n Bats Glbal Markets ( BATS ).

2 TABLE OF CONTENTS FUND SUMMARY- FORMULAFOLIOS TACTICAL GROWTH ETF 1 FUND SUMMARY- FORMULAFOLIOS SMART GROWTH ETF 5 ADDITIONAL INFORMATION ABOUT PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS Investment Objective 9 Principal Investment Strategies 9 Principal Investment Risks 10 Temprary Investments 13 Prtfli Hldings Disclsure 13 Cybersecurity 13 MANAGEMENT 14 Investment Adviser 14 Prtfli Managers 14 HOW SHARES ARE PRICED 15 HOW TO BUY AND SELL SHARES 16 FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES 16 DISTRIBUTION AND SERVICE PLAN 17 DIVIDENDS, OTHER DISTRIBUTIONS AND TAES 17 FUND SERVICE PROVIDERS 18 OTHER INFORMATION 19 FINANCIAL HIGHLIGHTS 19 Privacy Ntice 20 9

3 FUND SUMMARY - FrmulaFlis Tactical Grwth ETF Investment Objective: The Fund seeks lng-term ttal return. Fees and Expenses f the Fund: This table describes the fees and expenses that yu may pay if yu buy and hld shares f the Fund. Investrs purchasing r selling shares f the Fund in the secndary market may be subject t csts (including custmary brkerage cmmissins) charged by their brker. These csts are nt included in the expense example belw. Annual Fund Operating Expenses (expenses that yu pay each year as a percentage f the value f yur investment) Management Fees 0.60% Distributin and Service (12b-1) Fees 0.00% Other Expenses (1) 0.67% Acquired Fund Fees and Expenses (1) 0.20% Ttal Annual Fund Operating Expenses 1.47% Fee Waiver and/r Expense Reimbursement (2) (0.47%) Ttal Annual Fund Operating Expenses After Fee Waiver and/r Expense Reimbursement (1) Estimated fr the current fiscal year % (2) The Fund s adviser has cntractually agreed t reduce its fees and/r absrb expenses f the Fund, until at least September 30, 2018, t ensure that ttal annual fund perating expenses after fee waiver and/r reimbursement (exclusive f any frnt-end r cntingent deferred lads, taxes, brkerage fees and cmmissins, brrwing csts (such as interest and dividend expense n securities sld shrt), acquired fund fees and expenses, fees and expenses assciated with investments in ther cllective investment vehicles r derivative instruments (including fr example ptin and swap fees and expenses), r extrardinary expenses such as litigatin) will nt exceed 0.80% f the Fund s net assets. These fee waivers and expense reimbursements are subject t pssible recupment frm the Fund in future years (within the three years frm the date the fees have been waived r reimbursed), if such recupment can be achieved within the lesser f the freging expense limits r thse in place at the time f recapture. This agreement may be terminated nly by the Trust s Bard f Trustees, n 60 days written ntice t the Fund s adviser. Example: This Example is intended t help yu cmpare the cst f investing in the Fund with the cst f investing in ther mutual funds. The Example assumes that yu invest $10,000 in the Fund fr the time perids indicated and then redeem all f yur shares at the end f thse perids. The Example als assumes that yur investment has a 5% return each year and that the Fund s perating expenses remain the same. Althugh yur actual csts may be higher r lwer, based upn these assumptins yur csts wuld be: 1 Year 3 Years $102 $419 Prtfli Turnver: The Fund pays transactin csts, such as cmmissins, when it buys and sells securities (r turns ver its prtfli). A higher prtfli turnver rate may indicate higher transactin csts and may result in higher taxes when Fund shares are held in a taxable accunt. These csts, which are nt reflected in annual fund perating expenses r in the Example, affect the Fund s perfrmance. Principal Investment Strategies: The Fund is an actively managed exchange traded fund ( ETF ) that is a fund f funds. As an actively managed fund, the Fund will nt seek t replicate the perfrmance f an index. It seeks t achieve its investment bjective by investing primarily in freign and dmestic grwth-riented equity securities f any market capitalizatin, dmestic investment grade fixed incme securities (bnds) f any maturity r duratin, dmestic real estate investment trusts ( REITs ), and cmmdities (gld) securities thrugh unaffiliated ETFs. The adviser uses its prprietary investment mdel t rank 5 majr asset classes (US stcks, freign stcks f develped cuntries, real estate, gld, and US aggregate bnds) based n the strngest price mmentum, which measures the rate f the rise r fall in stck prices. The three highest-ranked asset classes are allcated t the prtfli with equal weightings, while the tw lwest ranked asset classes are left ut f the prtfli. In additin, if an asset class is nt displaying psitive mmentum, it is nt included in the prtfli even it is ne f the three highest ranked asset classes. T represent the

4 afrementined asset classes, the adviser generally invests in ne lw-cst, index-tracking ETF fr each represented asset class. These ETFs must, in the adviser s pinin, have a cmpetitive expense rati (lwest quartile f peers), illustrate the ability t clsely track its index, and maintain an apprpriate amunt f daily trading vlume (the 50-day Average Dllar Vlume f the underlying ETFs is at least 20 times greater than the 50-day Average Dllar Vlume traded within the Fund) t help avid liquidity issues. This prcess is repeated mnthly. The weighting fr any individual asset class depends n the prevailing market cnditins, with a maximum weight f 33.33% fr any ne asset class. When few (2 r fewer) r nne f the asset classes meet the mdel s price mmentum criteria, the Fund may invest heavily in shrt-term treasury bnds until mre asset classes becme favrable fr investing. Principal Investment Risks: As with all funds, there is the risk that yu culd lse mney thrugh yur investment in the Fund. Many factrs affect the Fund s net asset value and perfrmance. The fllwing describes the risks the Fund bears directly r indirectly thrugh investments in ther funds. As with any fund, there is n guarantee that the Fund will achieve its gal. Risk Direct Risk f the Fund Indirect Risk f the Fund Cmmdity Credit Equity Securities ETF Structure Fixed Incme Fluctuatin f NAV Freign Grwth Stck Limited Histry f Operatins Management REIT Sectr Cncentratin Securities Market Small and Medium Capitalizatin Stck Underlying Funds Cmmdity Risk. Investing in the cmmdities markets may subject the Fund t greater vlatility than investments in traditinal securities. Cmmdity prices may be influenced by unfavrable weather, animal and plant disease, gelgic and envirnmental factrs as well as changes in gvernment regulatin such as tariffs, embarges r burdensme prductin rules and restrictins. Credit Risk. Credit risk is the risk that the issuer f a security and ther instrument will nt be able t make principal and interest payments when due. Equity Securities Risk. Fluctuatins in the value f equity securities held by the Fund will cause the net asset value ( NAV ) f the Fund t fluctuate. Cmmn Stck Risks. Cmmn stck f an issuer in the Fund s prtfli may decline in price if the issuer fails t make anticipated dividend payments. Cmmn stck will be subject t greater dividend risk than preferred stcks r debt instruments f the same issuer. In additin, cmmn stcks have experienced significantly mre vlatility in returns than ther asset classes. Preferred Stck Risks. Generally, preferred stckhlders (such as the Fund) have n vting rights with respect t the issuing cmpany unless certain events ccur. In additin, preferred stck will be subject t greater credit risk than debt instruments f an issuer, and culd be subject t interest rate risk like fixed incme securities, as described belw. An issuer s bard f directrs is generally nt under any bligatin t pay a dividend (even if dividends have accrued), and may suspend payment f dividends n preferred stck at any time. There is als a risk that the issuer f any f the Fund s hldings will default and fail t make scheduled dividend payments n the preferred stck held by the Fund). 2

5 ETF Structure Risks. The Fund is structured as an ETF is subject t the special risks, including: Nt Individually Redeemable. Shares are nt individually redeemable and may be redeemed by the Fund at NAV nly in large blcks knwn as Creatin Units. Yu may incur brkerage csts purchasing enugh Shares t cnstitute a Creatin Unit. Trading Issues. An active trading market fr the Fund s shares may nt be develped r maintained. Trading in Shares n the Exchange may be halted due t market cnditins r fr reasns that, in the view f the Exchange, make trading in Shares inadvisable, such as extrardinary market vlatility. There can be n assurance that Shares will cntinue t meet the listing requirements f the Exchange. If the Fund s shares are traded utside a cllateralized settlement system, the number f financial institutins that can act as authrized participants that can pst cllateral n an agency basis is limited, which may limit the market fr the Fund s shares. Market Price Variance Risk. The market prices f Shares will fluctuate in respnse t changes in NAV and supply and demand fr Shares and will include a bid-ask spread charged by the exchange specialists, market makers r ther participants that trade the particular security. There may be times when the market price and the NAV vary significantly. This means that Shares may trade at a discunt t NAV. In times f market stress, market makers may step away frm their rle market making in shares f ETFs and in executing trades, which can lead t differences between the market value f Fund shares and the Fund s net asset value. T the extent authrized participants ( APs ) exit the business r are unable t prcess creatins r redemptins and n ther AP can step in t d s, there may be a significantly reduced trading market in the Fund s shares, which can lead t differences between the market value f Fund shares and the Fund s net asset value. The market price fr the Fund s shares may deviate frm the Fund s net asset value, particularly during times f market stress, with the result that investrs may pay significantly mre r receive significantly less fr Fund shares than the Fund s net asset value, which is reflected in the bid and ask price fr Fund shares r in the clsing price. When all r a prtin f an ETFs underlying securities trade in a market that is clsed when the market fr the Fund s shares is pen, there may be changes frm the last qute f the clsed market and the qute frm the Fund s dmestic trading day, which culd lead t differences between the market value f the Fund s shares and the Fund s net asset value. In stressed market cnditins, the market fr the Fund s shares may becme less liquid in respnse t the deterirating liquidity f the Fund s prtfli. This adverse effect n the liquidity f the Fund s shares may, in turn, lead t differences between the market value f the Fund s shares and the Fund s net asset value. Fixed Incme Risk. When the Fund invests in fixed incme securities, the value f yur investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value f fixed incme securities wned by the Fund. In general, the market price f fixed incme securities with lnger maturities will increase r decrease mre in respnse t changes in interest rates than shrter-term securities. Other risk factrs include credit risk (the debtr may default), extensin risk (an issuer may exercise its right t repay principal n a fixed rate bligatin held by the Fund later than expected), and prepayment risk (the debtr may pay its bligatin early, reducing the amunt f interest payments). These risks culd affect the value f a particular investment by the Fund, pssibly causing the Fund s share price and ttal return t be reduced and fluctuate mre than ther types f investments. Fluctuatin f Net Asset Value Risk. The NAV f the Fund s shares will generally fluctuate with changes in the market value f the Fund s hldings. The market prices f the shares will generally fluctuate in accrdance with changes in NAV as well as the relative supply f and demand fr the shares n the Exchange. The Adviser cannt predict whether the shares will trade belw, at r abve their NAV. Price differences may be due, in large part, t the fact that supply and demand frces at wrk in the secndary trading market fr the shares will be clsely related t, but nt identical t, the same frces influencing the prices f the Fund s hldings trading individually r in the aggregate at any pint in time. In additin, unlike cnventinal ETFs, the Fund is nt an index fund. The Fund is actively managed and des nt seek t replicate the perfrmance f a specified index. Index based ETFs have generally traded at prices which clsely crrespnd t NAV per share. Actively managed ETFs have a limited trading histry and, therefre, there can be n assurance as t whether and/r the extent t which the shares will trade at premiums r discunts t NAV. Freign Securities Risk. Since the Fund s investments may include ETFs with freign securities, the Fund is subject t risks beynd thse assciated with investing in dmestic securities. Freign cmpanies are generally nt subject t the same regulatry requirements f U.S. cmpanies thereby resulting in less publicly available infrmatin abut these cmpanies. In additin, freign accunting, auditing and financial reprting standards generally differ frm thse applicable t U.S. cmpanies. The value f freign securities is als affected by the value f the lcal currency relative t the U.S. dllar. 3

6 Grwth Stck Risk. Grwth stcks can react differently t issuer, plitical, market, and ecnmic develpments than the market as a whle and ther types f stcks. The stcks f such cmpanies can therefre be subject t mre abrupt r erratic market mvements than stcks f larger, mre established cmpanies r the stck market in general. Limited Histry f Operatins Risk. The Fund is a new fund with a limited histry f peratins fr investrs t evaluate. Management Risk. The Adviser may be incrrect in its assessment f the intrinsic value f the securities the Fund hlds which may result in a decline in the value f Fund shares and failure t achieve its investment bjective. The Fund s prtfli managers use qualitative analyses and/r mdels. Any imperfectins r limitatins in such analyses and mdels culd affect the ability f the prtfli managers t implement strategies. REIT Risk. The Fund may invest in REITs. The value f the Fund s investments in REITs may change in respnse t changes in the real estate market such as declines in the value f real estate, lack f available capital r financing pprtunities, and increases in prperty taxes r perating csts. Sharehlders f the Fund will indirectly be subject t the fees and expenses f the individual REITs in which the Fund invests. Sectr Cncentratin Risk. The Fund may fcus its investments in securities f a particular sectr. Ecnmic, legislative r regulatry develpments may ccur that significantly affect the sectr. This may cause the Fund s net asset value t fluctuate mre than that f a fund that des nt fcus in a particular sectr. Securities Market Risk. The value f securities wned by the Fund may g up r dwn, smetimes rapidly r unpredictably, due t factrs affecting particular cmpanies r the securities markets generally. A general dwnturn in the securities market may cause multiple asset classes t decline in value simultaneusly. Small and Medium Capitalizatin Stck Risk. The earnings and prspects f small and medium sized cmpanies are mre vlatile than larger cmpanies and may experience higher failure rates than larger cmpanies. Small and medium sized cmpanies nrmally have a lwer trading vlume than larger cmpanies, which may tend t make their market price fall mre disprprtinately than larger cmpanies in respnse t selling pressures and may have limited markets, prduct lines, r financial resurces and lack management experience. Underlying Funds Risk. Other investment cmpanies, such as ETFs ( Underlying Funds ), in which the Fund invests are subject t investment advisry and ther expenses, which will be indirectly paid by the Fund. As a result, the cst f investing in the Fund will be higher than the cst f investing directly in the Underlying Funds and may be higher than ther funds that invest directly in stcks and bnds. Each f the Underlying Funds is subject t its wn specific risks. The Fund will be subject t the principal investments risks f Underlying Funds by virtue f the Fund s investment in each such funds. Perfrmance: Because the Fund has nly recently cmmenced investment peratins, n perfrmance infrmatin is presented fr the Fund at this time. In the future, perfrmance infrmatin will be presented in this sectin f this Prspectus. Als, sharehlder reprts cntaining financial and perfrmance infrmatin will be mailed t sharehlders semi-annually. Updated perfrmance infrmatin will be available at n cst by visiting r by calling Investment Adviser: FrmulaFli Investments, LLC (the Adviser ) Prtfli Managers: Jasn Wenk, Funder and Chief Investment Officer f the Adviser and Derek Prusa, CFA, CFP, Senir Market Analyst f the Adviser as its prtfli managers since it cmmenced peratins in Purchase and Sale f Fund Shares: The Fund will issue and redeem Shares at NAV nly in large blcks f 25,000 Shares (each blck f Shares is called a Creatin Unit ). Creatin Units are issued and redeemed fr cash and/r in-kind fr securities. Individual Shares may nly be purchased and sld in secndary market transactins thrugh brkers. Except when aggregated in Creatin Units, the Shares are nt redeemable securities f the Fund. Shares f the Fund are listed fr trading n BATS (the Exchange ) and trade at market prices rather than NAV. Shares f the Fund may trade at a price that is greater than, at, r less than NAV. Tax Infrmatin: The Fund s distributins generally will be taxable as rdinary incme r lng-term capital gains. A sale f Shares may result in capital gain r lss. Payments t Brker-Dealers and Other Financial Intermediaries: If yu purchase the Fund thrugh a brker-dealer r ther financial intermediary (such as a bank), the Fund and its related cmpanies may pay the intermediary fr the sale f Fund shares and related services. These payments may create a cnflict f interest by influencing the brker-dealer r ther intermediary and yur salespersn t recmmend the Fund ver anther investment. Ask yur salespersn r visit yur financial intermediary s website fr mre infrmatin. 4

7 FUND SUMMARY - FrmulaFlis Smart Grwth ETF Investment Objective: The Fund seeks t prvide capital grwth. Fees and Expenses f the Fund: This table describes the fees and expenses that yu may pay if yu buy and hld shares f the Fund. Investrs purchasing r selling shares f the Fund in the secndary market may be subject t csts (including custmary brkerage cmmissins) charged by their brker. These csts are nt included in the expense example belw. Annual Fund Operating Expenses (expenses that yu pay each year as a percentage f the value f yur investment) Management Fees 0.35% Distributin and Service (12b-1) Fees 0.00% Other Expenses (1) 0.67% Acquired Fund Fees and Expenses (1) 0.11% Ttal Annual Fund Operating Expenses 1.13% Fee Waiver and/r Expense Reimbursement (2) (0.42%) Ttal Annual Fund Operating Expenses After Fee Waiver and/r Expense Reimbursement 0.71% (1) Estimated fr the current fiscal year. (2) The Fund s adviser has cntractually agreed t reduce its fees and/r absrb expenses f the Fund, until at least September 30, 2018, t ensure that ttal annual fund perating expenses after fee waiver and/r reimbursement (exclusive f any frnt-end r cntingent deferred lads, taxes, brkerage fees and cmmissins, brrwing csts (such as interest and dividend expense n securities sld shrt), acquired fund fees and expenses, fees and expenses assciated with investments in ther cllective investment vehicles r derivative instruments (including fr example ptin and swap fees and expenses), r extrardinary expenses such as litigatin) will nt exceed 0.60% f the Fund s net assets. These fee waivers and expense reimbursements are subject t pssible recupment frm the Fund in future years (within the three years frm the date the fees have been waived r reimbursed), if such recupment can be achieved within the lesser f the freging expense limits r thse in place at the time f recapture. This agreement may be terminated nly by the Trust s Bard f Trustees, n 60 days written ntice t the Fund s adviser. Example: This Example is intended t help yu cmpare the cst f investing in the Fund with the cst f investing in ther mutual funds. The Example assumes that yu invest $10,000 in the Fund fr the time perids indicated and then redeem all f yur shares at the end f thse perids. The Example als assumes that yur investment has a 5% return each year and that the Fund s perating expenses remain the same. Althugh yur actual csts may be higher r lwer, based upn these assumptins yur csts wuld be: 1 Year 3 Years $73 $317 Prtfli Turnver: The Fund pays transactin csts, such as cmmissins, when it buys and sells securities (r turns ver its prtfli). A higher prtfli turnver rate may indicate higher transactin csts and may result in higher taxes when Fund shares are held in a taxable accunt. These csts, which are nt reflected in annual fund perating expenses r in the Example, affect the Fund s perfrmance. Principal Investment Strategies: The Fund seeks t achieve its investment bjective by investing thrugh ther unaffiliated exchange traded funds ( ETFs ) primarily in dmestic and freign (including emerging markets) grwth-riented equity securities f any market capitalizatin (which include real estate investment trusts ( REITs )) and US Treasuries r ther cash equivalents. The Fund will generally be 100% invested in grwth-riented equity ETFs when the adviser s investment mdels indicate a bullish trend fr the equity market, and will generally be 50% invested in grwth-riented equity ETFs and 50% invested in US treasuries and/r ther cash equivalents t hedge risk when the adviser s mdels indicate a bearish trend fr the equity markets. Half f the Fund s prtfli is allcated t a basket f grwth-riented equity ETFs. The grwth-riented equity ETFs in the basket were selected based n their ptential t generate higher than average returns, mainly in the frm f capital appreciatin, ver a lng perid f time (at least tw years) while carrying a higher than average level f risk (higher than average ptential fr large decreases in prtfli value) based n histrical fundamental market research f varius grwth asset classes (e.g. small-cap US stcks, large-cap US stcks, emerging market stcks, and develped internatinal stcks). The ETFs in the basket must have cmpetitive expense ratis and clsely track the asset class t which the ETF s strategy is seeking expsure. This half f the Fund s prtfli is rebalanced nce per calendar year. 5

8 With the ther half f the prtfli, the adviser uses its investment mdel t identify trends in the equity markets. If the mdel indicates that the equity markets are in a lng-term (at least a year) bullish trend (stck prices are increasing) as measured by a blend f varius technical mmentum (analysis f price trends and supply and demand in the market in attempt t determine where prices are headed), ecnmic, and behaviral (uses behaviral psychlgical data t attempt t determine why investrs make certain financial decisins) analysis indicatrs, the mdel will suggest investments in the same basket f grwth-riented equity ETFs as the ther half f the prtfli, s the Fund will be fully invested in grwth-riented equity ETFs. If the mdel indicates that the equity markets are in a bearish trend (stck prices are decreasing) as measured by a blend f varius technical mmentum, ecnmic, and behaviral analysis indicatrs, the mdel will suggest investments in US treasuries and/r ther cash equivalents with the ther half f the prtfli, s the Fund will be 50% invested in grwth-riented equity ETFs and 50% invested in US treasuries and/r ther cash equivalents t hedge risk. The technical mmentum, ecnmic, and behaviral analysis indicatrs used t determine if the market is ding well r prly include mving average crssvers (bearish when the shrter term averages crss belw the lnger term averages), scillatrs (bearish when the current prices are clser t mre recent lw prices rather than mre recent high prices), price acceleratin measurements (bearish when trading vlume increases as prices are mving dwn, indicating faster dwnward price pressure) labr market data (bearish when fewer new jbs are being created and unemplyment is trending up), market breadth data (bearish when a higher number f stcks are belw their mving averages), earnings data (bearish when earnings estimates are being revised dwnward and when earnings are falling), and analyst sentiment data (bearish when analysts are revising lwer ecnmic grwth). This half f the Fund s prtfli is rebalanced mnthly. The Fund will typically hld 6-7 ETFs in its prtfli. Principal Investment Risks: As with all funds, there is the risk that yu culd lse mney thrugh yur investment in the Fund. Many factrs affect the Fund s net asset value and perfrmance. The fllwing describes the risks the Fund bears directly r indirectly thrugh investments in Underlying Funds. As with any fund, there is n guarantee that the Fund will achieve its gal. Risk Direct Risk f the Fund Indirect Risk f the Fund Emerging Markets Equity Securities ETF Structure Fluctuatin f NAV Freign Grwth Stck Limited Histry f Operatins Management REIT Securities Market Small and Medium Capitalizatin Stck Underlying Funds US Gvernment Securities Risk Emerging Markets Risk. Investing in emerging markets invlves nt nly the risks described belw with respect t investing in freign securities, but als ther risks, including expsure t ecnmic structures that are generally less diverse and mature, and t plitical systems that can be expected t have less stability, than thse f develped cuntries. The typically small size f the markets f securities f issuers lcated in emerging markets and the pssibility f a lw r nnexistent vlume f trading in thse securities may als result in a lack f liquidity and in price vlatility f thse securities. Equity Securities Risk. Fluctuatins in the value f equity securities held by the Fund will cause the net asset value ( NAV ) f the Fund t fluctuate. Cmmn Stck Risks. Cmmn stck f an issuer in the Fund s prtfli may decline in price if the issuer fails t make anticipated dividend payments. Cmmn stck will be subject t greater dividend risk than preferred stcks r debt instruments f the same issuer. In additin, cmmn stcks have experienced significantly mre vlatility in returns than ther asset classes. Preferred Stck Risks. Generally, preferred stckhlders (such as the Fund) have n vting rights with respect t the issuing cmpany unless certain events ccur. In additin, preferred stck will be subject t greater credit risk than debt instruments f an issuer, and culd be subject t interest rate risk like fixed incme securities, as described belw. An issuer s bard f directrs is generally nt under any bligatin t pay a dividend (even if dividends have accrued), and may suspend payment f dividends n preferred stck at any time. There is als a risk that the issuer f any f the Fund s hldings will default and fail t make scheduled dividend payments n the preferred stck held by the Fund). 6

9 ETF Structure Risks. The Fund is structured as an ETF and as a result is subject t the special risks, including: Nt Individually Redeemable. Shares are nt individually redeemable and may be redeemed by the Fund at NAV nly in large blcks knwn as Creatin Units. Yu may incur brkerage csts purchasing enugh Shares t cnstitute a Creatin Unit. Trading Issues. An active trading market fr the Fund s shares may nt be develped r maintained. Trading in Shares n the Exchange may be halted due t market cnditins r fr reasns that, in the view f the Exchange, make trading in Shares inadvisable, such as extrardinary market vlatility. There can be n assurance that Shares will cntinue t meet the listing requirements f the Exchange. If the Fund s shares are traded utside a cllateralized settlement system, the number f financial institutins that can act as authrized participants that can pst cllateral n an agency basis is limited, which may limit the market fr the Fund s shares. Market Price Variance Risk. The market prices f Shares will fluctuate in respnse t changes in NAV and supply and demand fr Shares and will include a bid-ask spread charged by the exchange specialists, market makers r ther participants that trade the particular security. There may be times when the market price and the NAV vary significantly. This means that Shares may trade at a discunt t NAV. In times f market stress, market makers may step away frm their rle market making in shares f ETFs and in executing trades, which can lead t differences between the market value f Fund shares and the Fund s net asset value. T the extent authrized participants ( APs ) exit the business r are unable t prcess creatins r redemptins and n ther AP can step in t d s, there may be a significantly reduced trading market in the Fund s shares, which can lead t differences between the market value f Fund shares and the Fund s net asset value. The market price fr the Fund s shares may deviate frm the Fund s net asset value, particularly during times f market stress, with the result that investrs may pay significantly mre r receive significantly less fr Fund shares than the Fund s net asset value, which is reflected in the bid and ask price fr Fund shares r in the clsing price. When all r a prtin f an ETFs underlying securities trade in a market that is clsed when the market fr the Fund s shares is pen, there may be changes frm the last qute f the clsed market and the qute frm the Fund s dmestic trading day, which culd lead t differences between the market value f the Fund s shares and the Fund s net asset value. In stressed market cnditins, the market fr the Fund s shares may becme less liquid in respnse t the deterirating liquidity f the Fund s prtfli. This adverse effect n the liquidity f the Fund s shares may, in turn, lead t differences between the market value f the Fund s shares and the Fund s net asset value. Fluctuatin f Net Asset Value Risk. The NAV f the Fund s shares will generally fluctuate with changes in the market value f the Fund s hldings. The market prices f the shares will generally fluctuate in accrdance with changes in NAV as well as the relative supply f and demand fr the shares n the Exchange. The Adviser cannt predict whether the shares will trade belw, at r abve their NAV. Price differences may be due, in large part, t the fact that supply and demand frces at wrk in the secndary trading market fr the shares will be clsely related t, but nt identical t, the same frces influencing the prices f the Fund s hldings trading individually r in the aggregate at any pint in time. In additin, unlike cnventinal ETFs, the Fund is nt an index fund. The Fund is actively managed and des nt seek t replicate the perfrmance f a specified index. Index based ETFs have generally traded at prices which clsely crrespnd t NAV per share. Actively managed ETFs have a limited trading histry and, therefre, there can be n assurance as t whether and/r the extent t which the shares will trade at premiums r discunts t NAV. Freign Securities Risk. Since the Fund s investments may include ETFs with freign securities, the Fund is subject t risks beynd thse assciated with investing in dmestic securities. Freign cmpanies are generally nt subject t the same regulatry requirements f U.S. cmpanies thereby resulting in less publicly available infrmatin abut these cmpanies. In additin, freign accunting, auditing and financial reprting standards generally differ frm thse applicable t U.S. cmpanies. The value f freign securities is als affected by the value f the lcal currency relative t the U.S. dllar. Grwth Stck Risk. Grwth stcks can react differently t issuer, plitical, market, and ecnmic develpments than the market as a whle and ther types f stcks. The stcks f such cmpanies can therefre be subject t mre abrupt r erratic market mvements than stcks f larger, mre established cmpanies r the stck market in general. Limited Histry f Operatins Risk. The Fund is a new fund with a limited histry f peratins fr investrs t evaluate. 7

10 Management Risk. The Adviser may be incrrect in its assessment f the intrinsic value f the securities the Fund hlds which may result in a decline in the value f Fund shares and failure t achieve its investment bjective. The Fund s prtfli managers use qualitative analyses and/r mdels. Any imperfectins r limitatins in such analyses and mdels culd affect the ability f the prtfli managers t implement strategies. REIT Risk. The Fund may invest in REITs. The value f the Fund s investments in REITs may change in respnse t changes in the real estate market such as declines in the value f real estate, lack f available capital r financing pprtunities, and increases in prperty taxes r perating csts. Sharehlders f the Fund will indirectly be subject t the fees and expenses f the individual REITs in which the Fund invests. Securities Market Risk. The value f securities wned by the Fund may g up r dwn, smetimes rapidly r unpredictably, due t factrs affecting particular cmpanies r the securities markets generally. A general dwnturn in the securities market may cause multiple asset classes t decline in value simultaneusly. Small and Medium Capitalizatin Stck Risk. The earnings and prspects f small and medium sized cmpanies are mre vlatile than larger cmpanies and may experience higher failure rates than larger cmpanies. Small and medium sized cmpanies nrmally have a lwer trading vlume than larger cmpanies, which may tend t make their market price fall mre disprprtinately than larger cmpanies in respnse t selling pressures and may have limited markets, prduct lines, r financial resurces and lack management experience. Underlying Funds Risk. Other investment cmpanies, such as ETFs ( Underlying Funds ), in which the Fund invests are subject t investment advisry and ther expenses, which will be indirectly paid by the Fund. As a result, the cst f investing in the Fund will be higher than the cst f investing directly in the Underlying Funds and may be higher than ther funds that invest directly in stcks and bnds. Each f the Underlying Funds is subject t its wn specific risks. The Fund will be subject t the principal investments risks f Underlying Funds by virtue f the Fund s investment in each such funds. US Gvernment Securities Risk. U.S. Treasury bligatins are backed by the full faith and credit f the U.S. gvernment and generally have negligible credit risk. Securities issued r guaranteed by federal agencies r authrities and U.S. gvernment-spnsred instrumentalities r enterprises may r may nt be backed by the full faith and credit f the U.S. gvernment. The Fund may be subject t such risk t the extent it invests in securities issued r guaranteed by federal agencies r authrities and U.S. gvernment-spnsred instrumentalities r enterprises. Perfrmance: Because the Fund has nly recently cmmenced investment peratins, n perfrmance infrmatin is presented fr the Fund at this time. In the future, perfrmance infrmatin will be presented in this sectin f this Prspectus. Als, sharehlder reprts cntaining financial and perfrmance infrmatin will be mailed t sharehlders semi-annually. Updated perfrmance infrmatin will be available at n cst by visiting r by calling Investment Adviser: FrmulaFli Investments, LLC (the Adviser ) Prtfli Managers: Jasn Wenk, Funder and Chief Investment Officer f the Adviser and Derek Prusa, CFA, CFP, Senir Market Analyst f the Adviser as its prtfli managers since it cmmenced peratins in Purchase and Sale f Fund Shares: The Fund will issue and redeem Shares at NAV nly in large blcks f 25,000 Shares (each blck f Shares is called a Creatin Unit ). Creatin Units are issued and redeemed fr cash and/r in-kind fr securities. Individual Shares may nly be purchased and sld in secndary market transactins thrugh brkers. Except when aggregated in Creatin Units, the Shares are nt redeemable securities f the Fund. Shares f the Fund are listed fr trading n BATS (the Exchange ) and trade at market prices rather than NAV. Shares f the Fund may trade at a price that is greater than, at, r less than NAV. Tax Infrmatin: The Fund s distributins generally will be taxable as rdinary incme r lng-term capital gains. A sale f Shares may result in capital gain r lss. Payments t Brker-Dealers and Other Financial Intermediaries: If yu purchase the Fund thrugh a brker-dealer r ther financial intermediary (such as a bank), the Fund and its related cmpanies may pay the intermediary fr the sale f Fund shares and related services. These payments may create a cnflict f interest by influencing the brker-dealer r ther intermediary and yur salespersn t recmmend the Fund ver anther investment. Ask yur salespersn r visit yur financial intermediary s website fr mre infrmatin. 8

11 ADDITIONAL INFORMATION ABOUT PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS INVESTMENT OBJECTIVE: Fund FrmulaFlis Tactical Grwth ETF ( Tactical Grwth ETF ) FrmulaFlis Smart Grwth ETF ( Smart Grwth ETF ) Investment Objective seeks lng-term ttal return seeks t prvide incme Each Fund s investment bjective may be changed by the Bard f Trustees upn 60 days written ntice t sharehlders. PRINCIPAL INVESTMENT STRATEGIES: Tactical Grwth ETF: The Fund is an actively managed ETF that is a fund f funds. As an actively managed fund, the Fund will nt seek t replicate the perfrmance f an index. It seeks t achieve its investment bjective by investing primarily in freign and dmestic grwth-riented equity securities f any market capitalizatin, dmestic investment grade fixed incme securities (bnds) f any maturity r duratin, dmestic REITs, and cmmdities (gld) securities thrugh ther unaffiliated ETFs. The adviser uses its prprietary investment mdel t rank 5 majr asset classes (US stcks, freign stcks f develped cuntries, real estate, gld, and US aggregate bnds) based n the strngest price mmentum, which measures the rate f the rise r fall in stck prices. The three highest-ranked asset classes are allcated t the prtfli with equal weightings, while the tw lwest ranked asset classes are left ut f the prtfli. In additin, if an asset class is nt displaying psitive mmentum, it is nt included in the prtfli even it is ne f the three highest ranked asset classes. T represent the afrementined asset classes, the adviser generally invests in ne lw-cst, index-tracking ETF fr each represented asset class. These ETFs must, in the adviser s pinin, have a cmpetitive expense rati (lwest quartile f peers), illustrate the ability t clsely track its index, and maintain an apprpriate amunt f daily trading vlume (the 50-day Average Dllar Vlume f the underlying ETFs is at least 20 times greater than the 50-day Average Dllar Vlume traded within the Fund) t help avid liquidity issues. This prcess is repeated mnthly. The weighting fr any individual asset class depends n the prevailing market cnditins, with a maximum weight f 33.33% fr any ne asset class. When few (2 r fewer) r nne f the asset classes meet the mdel s price mmentum criteria, the Fund may invest heavily in shrt-term treasury bnds until mre asset classes becme favrable fr investing. By cmbining numerus price mmentum indicatrs int a single screen, and by ranking the varius asset classes based n expected strength, the mdel attempts t actively accentuate the asset classes with the greatest ptential fr lng term returns with minimal risk. The mdel seeks t nly invest in asset classes with psitive price mmentum and exclude asset classes with negative (r relatively lw) price mmentum. The adviser believes that this can help prduce mre cnsistent returns thrugh maintaining a bradly diversified allcatin during perids f ecnmic grwth while als maintaining the ability t hedge dwnside risk during perids f perceived ecnmic stress. Smart Grwth ETF: The Fund seeks t achieve its investment bjective by investing thrugh ther unaffiliated exchange traded funds ( ETFs ) primarily in dmestic and freign (including emerging markets) grwth-riented equity securities f any market capitalizatin (which includes real estate investment trusts ( REITs )) and US Treasuries r ther cash equivalents. The Fund will generally be 100% invested in grwth-riented equity ETFs when the adviser s investment mdels indicate a bullish trend fr the equity market, and will generally be 50% invested in grwth-riented equity ETFs and 50% invested in US treasuries and/r ther cash equivalents t hedge risk when the adviser s mdels indicate a bearish trend fr the equity markets. Half f the Fund s prtfli is allcated t a basket f grwth-riented equity ETFs. The grwth-riented equity ETFs in the basket were selected based n their ptential t generate higher than average returns, mainly in the frm f capital appreciatin, ver a lng perid f time (at least tw years) while carrying a higher than average level f risk (higher than average ptential fr large decreases in prtfli value) based n histrical fundamental market research f varius grwth asset classes (e.g. small-cap US stcks, large-cap US stcks, emerging market stcks, and develped internatinal stcks). The ETFs in the basket must have cmpetitive expense ratis and clsely track the asset class t which the ETF s strategy is seeking expsure. This half f the Fund s prtfli is rebalanced nce per calendar year. 9

12 With the ther half f the prtfli, the adviser uses its investment mdel t identify trends in the equity markets. If the mdel indicates that the equity markets are in a lng-term (at least a year) bullish trend (stck prices are increasing) as measured by a blend f varius technical mmentum (analysis f price trends and supply and demand in the market in attempt t determine where prices are headed), ecnmic, and behaviral (uses behaviral psychlgical data t attempt t determine why investrs make certain financial decisins) analysis indicatrs, the mdel will suggest investments in the same basket f grwth-riented equity ETFs as the ther half f the prtfli, s the Fund will be fully invested in grwthriented equity ETFs. If the mdel indicates that the equity markets are in a bearish trend (stck prices are decreasing) as measured by a blend f varius technical mmentum, ecnmic, and behaviral analysis indicatrs, the mdel will suggest investments in US treasuries and/r ther cash equivalents with the ther half f the prtfli, s the Fund will be 50% invested in grwth-riented equity ETFs and 50% invested in US treasuries and/r ther cash equivalents t hedge risk. The technical mmentum, ecnmic, and behaviral analysis indicatrs used t determine if the market is ding well r prly include mving average crssvers (bearish when the shrter term averages crss belw the lnger term averages), scillatrs (bearish when the current prices are clser t mre recent lw prices rather than mre recent high prices), price acceleratin measurements (bearish when trading vlume increases as prices are mving dwn, indicating faster dwnward price pressure) labr market data (bearish when fewer new jbs are being created and unemplyment is trending up), market breadth data (bearish when a higher number f stcks are belw their mving averages), earnings data (bearish when earnings estimates are being revised dwnward and when earnings are falling), and analyst sentiment data (bearish when analysts are revising lwer ecnmic grwth). This half f the Fund s prtfli is rebalanced mnthly. By cmbining numerus market indicatrs and varius indicatr types int a single screen, the mdel attempts t react nly t majr market mvements while aviding the numerus false psitive signals that may be experienced when using a single stand-alne indicatr. This can help reduce verall prtfli turnver, resulting in ptential greater tax efficiency relative t ther actively managed Funds. The Fund will typically hld 6-7 ETFs in its prtfli. PRINCIPAL INVESTMENT RISKS The fllwing describes the risks the Funds bear directly r indirectly thrugh investments in Underlying Funds. Cmmdity Risk (Tactical Grwth ETF nly). The Fund s expsure t the cmmdities futures markets may subject the Fund t greater vlatility than investments in traditinal securities. The value f cmmdity-linked derivative instruments, cmmdity-based ntes may be affected by changes in verall market mvements, cmmdity index vlatility, changes in interest rates, r sectrs affecting a particular industry r cmmdity, such as drught, flds, weather, livestck disease, embarges, tariffs, and internatinal ecnmic, plitical and regulatry develpments. Credit Risk (Tactical Grwth ETF nly). Credit risk is the risk that an issuer f a security will fail t pay principal and interest in a timely manner, reducing the Fund s ttal return. Emerging Markets Risk (Smart Grwth ETF nly). The Fund may invest in cuntries with newly rganized r less develped securities markets. There are typically greater risks invlved in investing in emerging markets securities. Generally, ecnmic structures in these cuntries are less diverse and mature than thse in develped cuntries and their plitical systems tend t be less stable. Emerging market ecnmies may be based n nly a few industries, therefre security issuers, including gvernments, may be mre susceptible t ecnmic weakness and mre likely t default. Emerging market cuntries als may have relatively unstable gvernments, weaker ecnmies, and less-develped legal systems with fewer security hlder rights. Investments in emerging markets cuntries may be affected by gvernment plicies that restrict freign investment in certain issuers r industries. The ptentially smaller size f their securities markets and lwer trading vlumes can make investments relatively illiquid and ptentially mre vlatile than investments in develped cuntries, and such securities may be subject t abrupt and severe price declines. Due t this relative lack f liquidity, the Fund may have t accept a lwer price r may nt be able t sell a prtfli security at all. An inability t sell a prtfli psitin can adversely affect the Fund s value r prevent the Fund frm being able t meet cash bligatins r take advantage f ther investment pprtunities. Equity Securities Risk. Equity securities are susceptible t general stck market fluctuatins and t vlatile increases and decreases in value. The equity securities held by the Fund may experience sudden, unpredictable drps in value r lng perids f decline in value. This may ccur because f factrs affecting securities markets generally, the equity securities f a particular sectr, r a particular cmpany. ETF Structure Risk. Each Fund is structured as an ETF and as a result is subject t the special risks, including: Nt Individually Redeemable. Shares are nt individually redeemable and may be redeemed by the Fund at NAV nly in large blcks knwn as Creatin Units. Yu may incur brkerage csts purchasing enugh Shares t cnstitute a Creatin Unit. 10

13 Trading Issues. An active trading market fr the Fund s shares may nt be develped r maintained. Trading in Shares n the Exchange may be halted due t market cnditins r fr reasns that, in the view f the Exchange, make trading in Shares inadvisable, such as extrardinary market vlatility. There can be n assurance that Shares will cntinue t meet the listing requirements f the Exchange. If the Fund s shares are traded utside a cllateralized settlement system, the number f financial institutins that can act as authrized participants that can pst cllateral n an agency basis is limited, which may limit the market fr the Fund s shares. Market Price Variance Risk. Individual Shares f the Fund that are listed fr trading n the Exchange can be bught and sld in the secndary market at market prices. The market prices f Shares will fluctuate in respnse t changes in NAV and supply and demand fr Shares. There may be times when the market price and the NAV vary significantly and yu may pay mre than NAV when buying Shares n the secndary market, and yu may receive less than NAV when yu sell thse Shares. The market price f Shares, like the price f any exchange-traded security, includes a bid-ask spread charged by the exchange specialists, market makers r ther participants that trade the particular security. In times f severe market disruptin, the bid-ask spread ften increases significantly. This means that Shares may trade at a discunt t NAV and the discunt is likely t be greatest when the price f Shares is falling fastest, which may be the time that yu mst want t sell yur Shares. The Fund s investment results are measured based upn the daily NAV f the Fund ver a perid f time. Investrs purchasing and selling Shares in the secndary market may nt experience investment results cnsistent with thse experienced by thse creating and redeeming directly with the Fund. In times f market stress, market makers may step away frm their rle market making in shares f ETFs and in executing trades, which can lead t differences between the market value f Fund shares and the Fund s net asset value. T the extent authrized participants ( APs ) exit the business r are unable t prcess creatins r redemptins and n ther AP can step in t d s, there may be a significantly reduced trading market in the Fund s shares, which can lead t differences between the market value f Fund shares and the Fund s net asset value. The market price fr the Fund s shares may deviate frm the Fund s net asset value, particularly during times f market stress, with the result that investrs may pay significantly mre r receive significantly less fr Fund shares than the Fund s net asset value, which is reflected in the bid and ask price fr Fund shares r in the clsing price. When all r a prtin f an ETFs underlying securities trade in a market that is clsed when the market fr the Fund s shares is pen, there may be changes frm the last qute f the clsed market and the qute frm the Fund s dmestic trading day, which culd lead t differences between the market value f the Fund s shares and the Fund s net asset value. In stressed market cnditins, the market fr the Fund s shares may becme less liquid in respnse t the deterirating liquidity f the Fund s prtfli. This adverse effect n the liquidity f the Fund s shares may, in turn, lead t differences between the market value f the Fund s shares and the Fund s net asset value. Fixed Incme Risk (Tactical Grwth ETF nly). Fixed incme risk factrs include credit risk (the debtr may default) and prepayment risk (the debtr may pay its bligatin early r later than expected, ptentially reducing the amunt f interest payments r extending time t principal repayment). These risks culd affect the value f a particular investment pssibly causing the Fund s share price and ttal return t be reduced and fluctuate mre than ther types f investments. When the Fund invests in fixed incme securities the value f yur investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value f fixed incme securities. In general, the market price f debt securities with lnger maturities will increase r decrease mre in respnse t changes in interest rates than shrter-term securities. If the U.S. Federal Reserve s Federal Open Market Cmmittee ( FOMC ) raises the federal funds interest rate target, interest rates acrss the U.S. financial system may rise. Hwever, the magnitude f rate changes acrss maturities and brrwer sectrs is uncertain. Rising rates may decrease liquidity and increase vlatility, which may make prtfli management mre difficult and cstly t the Fund and its sharehlders. Additinally, default risk increases if issuers must brrw at higher rates. Generally, these changing market cnditins may cause the Fund s share price t fluctuate r decline mre than ther types f equity investments. Fluctuatin f Net Asset Value Risk. The NAV f each Fund s shares will generally fluctuate with changes in the market value f the Fund s hldings. The market prices f the shares will generally fluctuate in accrdance with changes in NAV as well as the relative supply f and demand fr the shares n the Exchange. The Adviser cannt predict whether the shares will trade belw, at r abve their NAV. Price differences may be due, in large part, t the fact that supply and demand frces at wrk in the secndary trading market fr the shares will be clsely related t, but nt identical t, the same frces influencing the prices f the Fund s hldings trading individually r in the aggregate at any pint in time. In additin, unlike cnventinal ETFs, the Fund is nt an index fund. The Fund is actively managed and des nt seek t replicate the perfrmance f a specified index. Index based ETFs have generally traded at prices which clsely crrespnd t NAV per share. Actively managed ETFs have a limited trading histry and, therefre, there can be n assurance as t whether and/r the extent t which the shares will trade at premiums r discunts t NAV. 11