N-CSRS 1 dncsr.htm dncsr.htm
As filed with the Securities and Exchange Commission on February 12, 2015

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-22842

FORUM FUNDS II
Three Canal Plaza, Suite 600
Portland, Maine 04101


Stacey E. Hong, Principal Executive Officer
Three Canal Plaza, Suite 600
Portland, Maine 04101
207-347-2000


Date of fiscal year end: June 30

Date of reporting period: July 18, 2014 – December 31, 2014



 
 
 
 

ITEM 1. REPORT TO STOCKHOLDERS.

 


 
 
 
 
 
 
TABLE OF CONTENTS
 
 

 
 
Acuitas International Small Cap Fund  
Performance Chart and Analysis   2
Schedule of Investments   3
Statement of Assets and Liabilities   8
Statement of Operations   9
Statement of Changes in Net Assets   10
Financial Highlights   11
 
 
Acuitas US Microcap Fund  
Performance Chart and Analysis  12
Schedule of Investments  13
Statement of Assets and Liabilities  15
Statement of Operations  16
Statement of Changes in Net Assets  17
Financial Highlights  18

Notes to Financial Statements  19
Additional Information  24


 
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
PERFORMANCE CHART AND ANALYSIS
DECEMBER 31, 2014


The following chart reflects the change in the value of a hypothetical $100,000 investment in Institutional Shares, including reinvested dividends and distributions, in Acuitas International Small Cap Fund (the “Fund”) compared with the performance of the benchmark, Russell Global Ex-US Small Cap Index (“Russell Global ex US”), since inception. The Russell Global ex US is an unmanaged index that offers investors access to the small-cap segment of the global equity market, excluding companies assigned to the US. The total return of the Russell Global ex US includes the reinvestment of dividends and income. The total return of the Fund includes operating expenses that reduce returns, while the total return of the Russell Global ex US does not include expenses. The Fund is professionally managed while the Russell Global ex US is unmanaged and is not available for investment.

 
 
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than original cost. For the most recent month-end performance, please call (844) 805-5628. Shares redeemed within 60 days of purchase will be charged a 1.00% redemption fee. As stated in the Fund's prospectus, the annual operating expense ratios (gross) for Institutional and Investor Shares are 2.09% and 2.89%, respectively. The Fund's adviser has contractually agreed to waive its fee and/or reimburse expenses to limit total annual fund operating expenses (excluding all taxes, interest, portfolio transaction expenses, acquired fund fees and expenses, proxy expenses and extraordinary expenses) to 1.50% and 1.75% for Institutional and Investor Shares, respectively, through November 1, 2015. The Fund may repay the Adviser for fees waived and expenses reimbursed pursuant to the expense cap if such payment (1) is made within three years of the fee waiver or expense reimbursement, (2) is approved by the Board of Trustees and (3) does not cause the net annual fund operating expenses of the Fund class to exceed the expense cap in place at the time the fees were waived. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
 
 
 
2
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2014



 
Shares
  
Security
Description
  
Value
  

Equity Securities - 94.7%
Common Stock - 94.6%
Australia - 2.1%
 
48,148
  
APN News & Media, Ltd. (a)
$
32,822
  
 
96,135
  
Decmil Group, Ltd.
  
114,980
  
 
69,910
  
Echo Entertainment Group, Ltd.
  
216,312
  
 
28,526
  
GrainCorp, Ltd., Class A
  
192,131
  
 
122,794
  
Orora, Ltd.
  
195,486
  
 
4,543
  
Sandfire Resources NL
  
16,876
  
 
27,580
  
Sigma Pharmaceuticals, Ltd.
  
16,662
  
 
17,358
  
Tassal Group, Ltd.
  
55,409
  
   
840,678
  
Austria - 2.0%
 
13,639
  
BUWOG AG (a)
  
270,334
  
 
3,372
  
Oesterreichische Post AG
  
164,762
  
 
11,040
  
Palfinger AG
  
280,404
  
 
533
  
Semperit AG Holding
  
25,914
  
 
1,167
  
Zumtobel Group AG
  
26,414
  
   
767,828
  
Belgium - 1.4%
 
11,752
  
AGFA-Gevaert NV (a)
  
29,721
  
 
2,861
  
Befimmo SA REIT
  
208,444
  
 
2,051
  
Cie d'Entreprises CFE
  
211,004
  
 
2,405
  
Melexis NV
  
109,131
  
   
558,300
  
Bermuda - 0.5%
 
18,178
  
Catlin Group, Ltd.
  
190,109
  
       
Brazil - 2.4%
 
88,700
  
BR Properties SA
  
342,026
  
 
269,470
  
Gafisa SA
  
223,021
  
 
12,280
  
Magazine Luiza SA
  
35,618
  
 
76,810
  
MRV Engenharia e Participacoes SA
  
216,716
  
 
43,031
  
QGEP Participacoes SA
  
116,554
  
   
933,935
  
Canada - 2.6%
 
43,210
  
Canam Group, Inc.
  
421,389
  
 
3,543
  
Dominion Diamond Corp. (a)
  
63,645
  
 
9,660
  
Finning International, Inc.
  
209,779
  
 
25,386
  
Genesis Land Development Corp. (a)
  
84,125
  
 
38,540
  
Precision Drilling Corp.
  
234,199
  
   
1,013,137
  
China - 1.9%
 
406,836
  
China Lesso Group Holdings, Ltd.
  
199,361
  
 
734,010
  
Daphne International Holdings, Ltd.
  
266,925
  
 
234,000
  
Zhejiang Expressway Co., Ltd.
  
271,881
  
   
738,167
  
Denmark - 1.1%
 
20,196
  
D/S Norden A/S
  
431,193
  
       
Faroe Islands - 0.0%
 
872
  
Bakkafrost P/F
  
19,597
  
       
Finland - 0.1%
 
4,764
  
Technopolis OYJ
  
21,329
  
       
France - 3.8%
 
768
  
Cegedim SA (a)
  
27,118
  
 
4,230
  
Eurazeo SA
  
297,949
  
 
53,106
  
EuropaCorp (a)
  
279,535
  
 
4,040
  
Neopost SA
  
230,473
  
 
2,859
  
Saft Groupe SA
  
87,007
  
 
16,299
  
Technicolor SA (a)
  
91,493
  

 

 
Shares
  
Security
Description
  
Value
  
 
 
1,441
  
Teleperformance
$
98,396
  
 
5,722
  
Vallourec SA
  
157,519
  
 
5,060
  
Vetoquinol SA (a)
  
219,810
  
   
1,489,300
  
Georgia - 0.5%
 
6,720
  
Bank of Georgia Holdings PLC
  
217,436
  
       
Germany - 7.6%
 
2,774
  
Aareal Bank AG
  
111,744
  
 
650
  
Amadeus Fire AG
  
49,080
  
 
6,390
  
Aurubis AG
  
359,896
  
 
337
  
Bechtle AG
  
26,906
  
 
166
  
Bertrandt AG
  
23,100
  
 
8,150
  
Carl Zeiss Meditec AG
  
208,086
  
 
770
  
Cewe Stiftung & Co. KGAA
  
47,994
  
 
44,550
  
Deutz AG
  
215,631
  
 
8,963
  
Dialog Semiconductor PLC (a)
  
318,050
  
 
7,711
  
DMG MORI SEIKI AG
  
219,271
  
 
5,696
  
Duerr AG
  
504,941
  
 
951
  
Homag Group AG
  
34,523
  
 
2,796
  
Krones AG
  
273,235
  
 
675
  
Nemetschek AG
  
68,291
  
 
16,614
  
Nordex SE (a)
  
301,657
  
 
4,656
  
Rheinmetall AG
  
204,345
  
 
661
  
Stroeer Media SE
  
19,772
  
   
2,986,522
  
Gibraltar - 1.1%
 
63,044
  
888 Holdings PLC
  
136,091
  
 
164,090
  
Bwin.Party Digital Entertainment PLC
  
301,274
  
   
437,365
  
Greece - 0.3%
 
23,660
  
Hellenic Exchanges - Athens Stock Exchange SA Holding
  
133,129
  
       
Hong Kong - 4.7%
 
125,000
  
Brightoil Petroleum Holdings, Ltd. (a)
  
31,755
  
 
56,255
  
China Cord Blood Corp. (a)
  
254,273
  
 
376,917
  
Dah Chong Hong Holdings, Ltd.
  
203,656
  
 
1,637,200
  
Dorsett Hospitality International, Ltd.
  
280,796
  
 
80,000
  
Emperor International Holdings, Ltd.
  
17,435
  
 
71,000
  
Far East Consortium International, Ltd.
  
27,559
  
 
53,000
  
Huabao International Holdings, Ltd.
  
43,263
  
 
58,000
  
IT, Ltd.
  
16,754
  
 
426,000
  
Ju Teng International Holdings, Ltd.
  
209,851
  
 
146,000
  
Lifestyle International Holdings, Ltd.
  
307,263
  
 
3,118,996
  
REXLot Holdings, Ltd.
  
253,392
  
 
65,000
  
SmarTone Telecommunications Holdings, Ltd.
  
108,967
  
 
102,000
  
Tianjin Development Holdings, Ltd.
  
75,369
  
   
1,830,333
  
Ireland - 0.7%
 
12,011
  
Smurfit Kappa Group PLC
  
270,331
  
       
Isle Of Man - 1.2%
 
5,565
  
Optimal Payments PLC (a)
  
29,729
  
 
41,210
  
Playtech PLC
  
442,544
  
   
472,273
  
Italy - 3.2%
 
5,105
  
ACEA SpA
  
55,225
  
 
2,313
  
Amplifon SpA
  
13,726
  
 
29,274
  
Ansaldo STS SpA
  
295,074
  
 
9,620
  
Banca Generali SpA
  
268,318
  
 
7,321
  
Biesse SpA
  
82,918
  


 
See Notes to Financial Statements.                                                       3
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2014



 
Shares
  
Security
Description
  
Value
  
 
 
9,842
  
Brembo SpA
$
329,888
  
 
11,750
  
MARR SpA
  
209,290
  
   
1,254,439
  
       
Japan - 23.2%
 
17,800
  
Alpine Electronics, Inc.
  
296,617
  
 
9,800
  
Arcs Co., Ltd.
  
203,478
  
 
2,300
  
BML, Inc.
  
61,350
  
 
3,500
  
Canon Marketing Japan, Inc.
  
59,843
  
 
3,400
  
Cawachi, Ltd.
  
50,668
  
 
19,000
  
Chiyoda Corp.
  
159,576
  
 
25,000
  
Chugoku Marine Paints, Ltd.
  
213,725
  
 
23,000
  
Daihen Corp.
  
116,939
  
 
1,100
  
Daikokutenbussan Co., Ltd.
  
31,913
  
 
9,200
  
Daiseki Co., Ltd.
  
160,912
  
 
18,000
  
Daiwabo Holdings Co., Ltd.
  
31,558
  
 
63,000
  
Denki Kagaku Kogyo KK
  
233,528
  
 
47,500
  
EDION Corp.
  
336,283
  
 
18,700
  
EPS Corp.
  
223,251
  
 
17,800
  
FIDEA Holdings Co., Ltd.
  
32,693
  
 
23,100
  
Funai Electric Co., Ltd. (a)
  
280,602
  
 
2,700
  
Geo Holdings Corp.
  
21,752
  
 
11,600
  
Happinet Corp.
  
146,138
  
 
64,400
  
Hitachi Zosen Corp.
  
377,432
  
 
4,600
  
Hogy Medical Co., Ltd.
  
211,221
  
 
2,700
  
Hosiden Corp.
  
15,170
  
 
13,500
  
IT Holdings Corp.
  
205,013
  
 
3,000
  
Jeol, Ltd.
  
15,604
  
 
17,000
  
J-Oil Mills, Inc.
  
55,493
  
 
62,800
  
JVC Kenwood Corp. (a)
  
137,889
  
 
3,200
  
Kaga Electronics Co., Ltd.
  
40,421
  
 
84,000
  
Kanematsu Corp.
  
121,322
  
 
1,400
  
Kato Sangyo Co., Ltd.
  
26,661
  
 
2,500
  
Kura Corp.
  
70,859
  
 
35,500
  
Makino Milling Machine Co., Ltd.
  
267,035
  
 
30,000
  
Marudai Food Co., Ltd.
  
103,690
  
 
31,700
  
Marui Group Co., Ltd.
  
289,529
  
 
143,100
  
Monex Group, Inc.
  
345,266
  
 
29,000
  
Morinaga Milk Industry Co., Ltd.
  
100,718
  
 
5,700
  
Nabtesco Corp.
  
139,859
  
 
2,300
  
NEC Networks & System Integration Corp.
  
48,024
  
 
7,200
  
NET One Systems Co., Ltd.
  
42,798
  
 
700
  
Pal Co., Ltd.
  
19,344
  
 
38,700
  
Pioneer Corp. (a)
  
74,634
  
 
50,900
  
Round One Corp.
  
299,162
  
 
9,900
  
Ryosan Co., Ltd.
  
217,952
  
 
4,500
  
Saizeriya Co., Ltd.
  
59,547
  
 
10,000
  
Sakai Chemical Industry Co., Ltd.
  
31,892
  
 
7,000
  
Sanshin Electronics Co., Ltd.
  
48,272
  
 
22,000
  
Sanyo Shokai, Ltd.
  
53,815
  
 
3,000
  
Seino Holdings Co., Ltd.
  
30,506
  
 
16,000
  
Star Micronics Co., Ltd.
  
205,710
  
 
73,000
  
Sumitomo Heavy Industries, Ltd.
  
397,971
  
 
9,550
  
Sumitomo Real Estate Sales Co., Ltd.
  
217,103
  
 
63,100
  
Takara Leben Co., Ltd.
  
276,570
  
 
4,000
  
Take And Give Needs Co., Ltd.
  
32,727
  
 
30,000
  
Takuma Co., Ltd.
  
202,121
  
 
73,000
  
The Nishi-Nippon City Bank, Ltd.
  
213,308
  
 
53,000
  
The Nisshin Oillio Group, Ltd.
  
186,283
  
 
9,000
  
The Shikoku Bank, Ltd.
  
19,010
  
 
2,600
  
Toppan Forms Co., Ltd.
  
26,352
  
 
21,000
  
Toyo Kanetsu KK
  
43,129
  
 
8,200
  
Unipres Corp.
  
135,685
  
 
5,400
  
Warabeya Nichiyo Co., Ltd.
  
91,518
  
 

 
Shares
  
Security
Description
  
Value
  
 
 
8,500
  
Xebio Co., Ltd.
$
142,637
  
 
28,000
  
Yamazaki Baking Co., Ltd.
  
347,838
  
 
5,000
  
Yuasa Trading Co., Ltd.
  
99,015
  
 
18,800
  
Yushin Precision Equipment Co., Ltd.
  
360,995
  
   
9,107,926
  
Malaysia - 0.5%
 
32,400
  
Berjaya Sports Toto Bhd
  
32,525
  
 
9,700
  
Malaysian Pacific Industries Bhd
  
12,567
  
 
312,200
  
Supermax Corp. Bhd
  
150,006
  
   
195,098
  
Malta - 0.4%
 
2,370
  
Unibet Group PLC, SDR
  
149,730
  
       
Mexico - 1.7%
 
387,533
  
Consorcio ARA SAB de CV (a)
  
170,471
  
 
14,507
  
Corp Inmobiliaria Vesta SAB de CV
  
28,790
  
 
68,450
  
Grupo Simec SAB de CV, Class B (a)
  
235,316
  
 
4,228
  
Industrias Bachoco SAB de CV, Class B (a)
  
17,750
  
 
95,950
  
TF Administradora Industrial S de RL de CV REIT (a)
  
200,761
  
   
653,088
  
Netherlands - 1.7%
 
366
  
ASM International NV
  
15,545
  
 
5,723
  
BE Semiconductor Industries NV
  
128,323
  
 
11,344
  
Delta Lloyd NV
  
249,622
  
 
32,180
  
TNT Express NV
  
215,763
  
 
9,491
  
TomTom NV (a)
  
63,498
  
   
672,751
  
Norway - 2.0%
 
44,932
  
Austevoll Seafood ASA
  
280,335
  
 
531,856
  
Dolphin Group AS (a)
  
206,948
  
 
890
  
Kongsberg Gruppen ASA
  
14,688
  
 
7,709
  
Salmar ASA
  
131,879
  
 
230,000
  
Vard Holdings, Ltd. (a)
  
104,179
  
 
3,126
  
Veidekke ASA
  
30,933
  
   
768,962
  
Poland - 0.5%
 
5,290
  
Budimex SA
  
211,418
  
       
Portugal - 0.7%
 
84,530
  
Mota-Engil SGPS SA
  
272,182
  
       
Republic Of South Korea - 2.2%
 
24,686
  
Bixolon Co., Ltd. (a)
  
238,067
  
 
4,678
  
Daeduck Electronics Co. (a)
  
38,219
  
 
9,124
  
GS Retail Co., Ltd. (a)
  
212,920
  
 
329
  
Hanjin Transportation Co., Ltd. (a)
  
16,223
  
 
10,019
  
SL Corp. (a)
  
158,605
  
 
20,559
  
Tongyang Life Insurance (a)
  
201,073
  
   
865,107
  
Singapore - 1.0%
 
279,800
  
Keppel DC REIT (a)
  
205,945
  
 
133,000
  
Singapore Post, Ltd.
  
192,775
  
   
398,720
  
South Africa - 0.5%
 
11,670
  
Group Five, Ltd.
  
29,488
  
 
416,812
  
KAP Industrial Holdings, Ltd.
  
176,558
  
   
206,046
  
Spain - 0.6%
 
5,528
  
CIE Automotive SA
  
75,353
  
 
7,517
  
Papeles y Cartones de Europa SA
  
34,838
  
 
33,770
  
Zeltia SA (a)
  
109,105
  
   
219,296
  

 
See Notes to Financial Statements.                                                 4
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2014



 
Shares
  
Security
Description
  
Value
  
 
Sweden - 3.8%
 
3,393
  
Axfood AB
  
203,043
  
 
6,813
  
Clas Ohlson AB, Class B
  
117,766
  
 
1,976
  
Duni AB, Class A
  
29,404
  
 
3,601
  
Granges AB (a)
  
23,558
  
 
10,577
  
Haldex AB
  
138,054
  
 
15,096
  
Intrum Justitia AB
  
449,266
  
 
14,086
  
JM AB
  
449,925
  
 
20,963
  
Klovern AB, Class A
  
22,051
  
 
589
  
Loomis AB, Class B
  
17,076
  
 
1,008
  
Net Entertainment NE AB, Class B
  
34,007
  
   
1,484,150
  
Switzerland - 2.4%
 
3,170
  
Coltene Holding AG
  
200,875
  
 
244
  
Forbo Holding AG
  
244,074
  
 
13,290
  
Gategroup Holding AG (a)
  
379,638
  
 
9,943
  
Logitech International SA
  
134,513
  
   
959,100
  
Taiwan - 3.8%
 
71,000
  
Ability Enterprise Co., Ltd.
  
37,407
  
 
24,060
  
Airtac International Group
  
217,745
  
 
107,780
  
Chicony Electronics Co., Ltd.
  
301,833
  
 
260,300
  
China Life Insurance Co., Ltd.
  
216,628
  
 
50,770
  
Cleanaway Co., Ltd.
  
235,359
  
 
15,000
  
Elite Semiconductor Memory Technology, Inc.
  
24,302
  
 
199,328
  
King's Town Bank Co., Ltd.
  
207,200
  
 
9,000
  
Sitronix Technology Corp.
  
23,182
  
 
5,000
  
Soft-World International Corp.
  
15,822
  
 
156,000
  
Tong Yang Industry Co., Ltd.
  
180,919
  
 
39,000
  
Wan Hai Lines, Ltd.
  
34,246
  
   
1,494,643
  
Thailand - 0.5%
 
31,700
  
Thai Stanley Electric PCL, Class F
  
194,632
  
       
Turkey - 0.4%
 
184,868
  
Turkiye Sinai Kalkinma Bankasi AS
  
159,959
  
       
United Arab Emirates - 0.6%
 
27,475
  
Dragon Oil PLC
  
230,171
  
       
United Kingdom - 10.4%
 
117,380
  
Arrow Global Group PLC
  
416,208
  
 
2,812
  
Bellway PLC
  
84,982
  
 
13,496
  
Berendsen PLC
  
231,384
  
 
7,218
  
Betfair Group PLC
  
176,850
  
 
19,549
  
Bovis Homes Group PLC
  
269,499
  
 
17,677
  
Domino's Pizza Group PLC
  
193,548
  
 
30,530
  
Drax Group PLC
  
219,172
  
 
4,515
  
Go-Ahead Group PLC
  
173,042
  
 
7,760
  
Greggs PLC
  
88,534
  
 
20,219
  
Halfords Group PLC
  
147,987
  
 
22,733
  
Home Retail Group PLC
  
73,521
  
 
14,433
  
Howden Joinery Group PLC
  
90,656
  
 
12,937
  
Kennedy Wilson Europe Real Estate PLC
  
212,726
  
 
25,320
  
Lookers PLC
  
51,303
  
 
340,880
  
McBride PLC
  
425,037
  
 
44,270
  
Michael Page International PLC
  
284,208
  
 
29,435
  
N Brown Group PLC
  
175,894
  
 
32,415
  
Novae Group PLC
  
301,238
  
 
44,650
  
Pace PLC
  
241,552
  
 
77,753
  
QinetiQ Group PLC
  
227,708
  
   
4,085,049
  


 
Shares
  
Security
Description
  
Value
  
 
Virgin Islands, British - 0.5%
 
254,622
  
Symphony International Holdings, Ltd.
$
206,244
  
Total Common Stock
(Cost $39,294,587)
    
37,139,673
  

 
 
Shares
  
Security
Description
  
Rate
    
Value
  

Preferred Stock - 0.1%
Brazil - 0.1%
 
4,470
  
Cia de Transmissao de Energia Eletrica Paulista (Cost $66,348)
  
1.02
%
  
69,786
  
Total Equity Securities
(Cost $39,360,935)
     37,209,459  

 
Shares
  
Security
Description
  
Value
  
 
Money Market Fund - 5.1%
 
1,990,003
  
Short-Term Investments Trust Liquid Asset Portfolio, 0.01% (b) (Cost $1,990,003)
  
1,990,003
  
Total Investments - 99.8%
(Cost $41,350,938)*
   $   39,199,462  
Other Assets & Liabilities, Net – 0.2%
    67,975  
Net Assets – 100.0%
 $  39,267,437  
 
PCL
Public Company Limited
PLC
Public Limited Company
REIT
Real Estate Investment Trust
SDR
Swedish Depositary Receipt
(a)
Non-income producing security.
(b)
Variable rate security. Rate presented is as of December 31, 2014.

* 
Cost for federal income tax purposes is substantially the same as for financial statement purposes and net unrealized depreciation consists of:
 
Gross Unrealized Appreciation
  
$
1,083,731
  
Gross Unrealized Depreciation
    
(3,235,207
)
Net Unrealized Depreciation
  
$
(2,151,476
)


 
See Notes to Financial Statements.                                                 5
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2014



The values of each individual forward currency contract outstanding in Acuitas International Small Cap Fund as of December 31, 2014, are disclosed in the table below.
 
Contracts to Purchase/(Sell)
  
Settlement Date
  
Settlement Value
  
Net Unrealized Appreciation (Depreciation)
(31,659
)
  
Canadian Dollars
  
01/05/15
  
$
27,276
    
$
28
  
(21,420
)
  
Canadian Dollars
  
01/05/15
    
18,455
      
21
  
17,524
    
European Union Euro
  
01/02/15
    
(21,302
)
    
(98
)
299,785
    
Hong Kong Dollar
  
01/05/15
    
(38,644
)
    
15
  
20,233
    
Thailand Baht
  
01/05/15
    
(615
)
    
-
  
60,699
    
Thailand Baht
  
01/05/15
    
(1,846
)
    
(1
)
                           
                     
$
(35
)

The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in Note 2 of the accompanying Notes to Financial Statements.
 
The following is a summary of the inputs used to value the Fund’s investments and other financial instruments and liabilities as of December 31, 2014.
 

 
Level 1
  
Level 2
  
Level 3
  
Total

Assets
Investments At Value
Common Stock
                                
Australia
  
$
840,678
    
$
-
    
$
-
    
$
840,678
  
Austria
    
767,828
      
-
      
-
      
767,828
  
Belgium
    
558,300
      
-
      
-
      
558,300
  
Bermuda
    
190,109
      
-
      
-
      
190,109
  
Brazil
    
933,935
      
-
      
-
      
933,935
  
Canada
    
1,013,137
      
-
      
-
      
1,013,137
  
China
    
738,167
      
-
      
-
      
738,167
  
Denmark
    
431,193
      
-
      
-
      
431,193
  
Faroe Islands
    
19,597
      
-
      
-
      
19,597
  
Finland
    
21,329
      
-
      
-
      
21,329
  
France
    
1,489,300
      
-
      
-
      
1,489,300
  
Georgia
    
217,436
      
-
      
-
      
217,436
  
Germany
    
2,986,522
      
-
      
-
      
2,986,522
  
Gibraltar
    
437,365
      
-
      
-
      
437,365
  
Greece
    
133,129
      
-
      
-
      
133,129
  
Hong Kong
    
1,830,333
      
-
      
-
      
1,830,333
  
Ireland
    
270,331
      
-
      
-
      
270,331
  
Isle Of Man
    
472,273
      
-
      
-
      
472,273
  
Italy
    
1,254,439
      
-
      
-
      
1,254,439
  
Japan
    
9,107,926
      
-
      
-
      
9,107,926
  
Malaysia
    
195,098
      
-
      
-
      
195,098
  
Malta
    
149,730
      
-
      
-
      
149,730
  
Mexico
    
653,088
      
-
      
-
      
653,088
  
Netherlands
    
672,751
      
-
      
-
      
672,751
  
Norway
    
768,962
      
-
      
-
      
768,962
  
Poland
    
211,418
      
-
      
-
      
211,418
  
Portugal
    
272,182
      
-
      
-
      
272,182
  
Republic Of South Korea
    
865,107
      
-
      
-
      
865,107
  
Singapore
    
398,720
      
-
      
-
      
398,720
  
South Africa
    
206,046
      
-
      
-
      
206,046
  
Spain
    
219,296
      
-
      
-
      
219,296
  
Sweden
    
1,484,150
      
-
      
-
      
1,484,150
  
Switzerland
    
959,100
      
-
      
-
      
959,100
  
Taiwan
    
1,494,643
      
-
      
-
      
1,494,643
  


 
See Notes to Financial Statements.                                                 6
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2014



 
Level 1
  
Level 2
  
Level 3
  
Total

Thailand
  
$
194,632
    
$
-
    
$
-
    
$
194,632
  
Turkey
    
159,959
      
-
      
-
      
159,959
  
United Arab Emirates
    
230,171
      
-
      
-
      
230,171
  
United Kingdom
    
4,085,049
      
-
      
-
      
4,085,049
  
Virgin Islands, British
    
206,244
      
-
      
-
      
206,244
  
Preferred Stock
                                
Brazil
    
69,786
      
-
      
-
      
69,786
  
Money Market Funds
    
-
      
1,990,003
      
-
      
1,990,003
  
Total Investments At Value
  
$
37,209,459
    
$
1,990,003
    
$
-
    
$
39,199,462
  

Other Financial Instruments**
                                
Forward Currency Contracts
    
-
      
64
      
-
      
64
  
Total Assets
  
$
37,209,459
    
$
1,990,067
    
$
-
    
$
39,199,526
  

Liabilities
                                
Other Financial Instruments**
                                
Forward Currency Contracts
    
-
      
(99
)
  
-
      
(99
)
Total Liabilities
  
$
-
    
$
(99
)
$
-
    
$
(99
)
**Other Financial Instruments are derivatives not reflected in the schedule of investments, such as forward currency contracts, which are valued at the unrealized appreciation (depreciation) of the instrument at period end.
The Fund utilizes the end of period methodology when determining transfers. There were no transfers among Level 1, Level 2 and Level 3 for the period ended December 31, 2014.
 

PORTFOLIO HOLDINGS
      
% of Total Investments
      
Australia
     2.1 %
Austria
     2.0 %
Belgium
     1.4 %
Bermuda
     0.5 %
Brazil
     2.6 %
Canada
     2.6 %
China
     1.9 %
Denmark
     1.1 %
Faroe Islands
     0.0 %
Finland
     0.1 %
France
     3.8 %
Georgia
     0.6 %
Germany
     7.6 %
Gibraltar
     1.1 %
Greece
     0.3 %
Hong Kong
     4.7 %
Ireland
     0.7 %
Isle Of Man
     1.2 %
Italy
     3.2 %
Japan
     23.2 %
Malaysia
     0.5 %
Malta
     0.4 %
Mexico
     1.7 %
Netherlands
     1.7 %
Norway
     2.0 %
Poland
     0.5 %
Portugal
     0.7 %
Republic Of South Korea
     2.2 %
Singapore
     1.0 %
South Africa
     0.5 %
Spain
     0.6 %
Sweden
     3.8 %
Switzerland
     2.4 %
Taiwan
     3.8 %
Thailand
     0.5 %
Turkey
     0.4 %
United Arab Emirates
     0.6 %
United Kingdom
     10.4 %
Virgin Islands, British
     0.5 %
Money Market Fund
     5.1 %
      100.0 %

 
 
See Notes to Financial Statements.                                                 7
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2014


             
ASSETS
        
 
Total investments, at value (Cost $41,350,938)
  
$
39,199,462
  
 
Foreign currency (Cost $69,045)
    
69,371
  
 
Receivables:
        
   
Fund shares sold
    
226,469
  
   
Investment securities sold
    
214,272
  
   
Dividends
    
36,533
  
 
From investment adviser
    
10,775
  
 
Unrealized gain on forward currency contracts
    
64
  
 
Prepaid expenses
    
126
  
 
Deferred offering costs
    
32,223
  
Total Assets
    
39,789,295
  
             
LIABILITIES
        
 
Unrealized loss on forward currency contracts
    
99
  
 
Payables:
        
   
Investment securities purchased
    
495,388
  
 
Accrued Liabilities:
        
   
Trustees’ fees and expenses
    
1,371
  
   
Fund services fees
    
9,150
  
   
Other expenses
    
15,850
  
Total Liabilities
    
521,858
  
             
NET ASSETS
  
$
 39,267,437
  
             
COMPONENTS OF NET ASSETS
        
 
Paid-in capital
  
$
42,969,535
  
 
Distributions in excess of net investment income
    
(45,663
)
 
Accumulated net realized loss
    
(1,503,828
)
 
Net unrealized depreciation
    
(2,152,607
)
NET ASSETS
  
$
39,267,437
  
SHARES OF BENEFICIAL INTEREST AT NO PAR VALUE (UNLIMITED SHARES AUTHORIZED)
    
4,349,062
  
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE*
  
$
9.03
  
*
Shares redeemed or exchanged within 60 days of purchase are charged a 1.00% redemption fee.
        

 
See Notes to Financial Statements.                                                 8
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
STATEMENT OF OPERATIONS
PERIOD ENDED DECEMBER 31, 2014


               
INVESTMENT INCOME
          
 
Dividend income (Net of foreign withholding taxes of $25,689)
  
$
278,963
    
           
EXPENSES
          
 
Investment adviser fees
    
199,109
    
 
Fund services fees
    
67,298
    
 
Custodian fees
    
44,379
    
 
Registration fees
    
2,735
    
 
Professional fees
    
15,362
    
 
Trustees' fees and expenses
    
2,871
    
 
Offering costs
    
29,438
    
 
Miscellaneous expenses
    
30,179
    
Total Expenses
    
391,371
    
 
Fees waived and expenses reimbursed
    
(142,484
)
  
Net Expenses
    
248,887
    
               
NET INVESTMENT INCOME
    
30,076
    
               
NET REALIZED AND UNREALIZED GAIN (LOSS)
          
 
Net realized gain (loss) on:
          
 
Investments
    
(1,454,818
)
  
 
Foreign currency transactions
    
(49,010
)
  
 
Net realized loss
    
(1,503,828
)
  
 
Net change in unrealized appreciation (depreciation) on:
          
 
Investments
    
(2,151,476
)
  
 
Foreign currency translations
    
(1,131
)
  
 
Net change in unrealized appreciation (depreciation)
    
(2,152,607
)
  
NET REALIZED AND UNREALIZED LOSS
    
(3,656,435
)
  
DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
  
$
 (3,626,359
)
  
               
*
Commencement of operations was July 18, 2014.
          

 
See Notes to Financial Statements.                                                 9
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
STATEMENT OF CHANGES IN NET ASSETS



       
July 18, 2014* through
December 31, 2014
  
OPERATIONS
          
 
Net investment income
  
$
30,076
    
 
Net realized loss
    
(1,503,828
)
  
 
Net change in unrealized appreciation (depreciation)
    
(2,152,607
)
  
Decrease in Net Assets Resulting from Operations
    
(3,626,359
)
  
               
DISTRIBUTIONS TO SHAREHOLDERS FROM
          
 
Net investment income
    
(75,739
)
  
               
CAPITAL SHARE TRANSACTIONS
          
 
Sale of shares
    
46,044,374
    
 
Reinvestment of distributions
    
75,739
    
 
Redemption of shares
    
(3,152,218
)
  
 
Redemption fees
    
1,640
    
Increase in Net Assets from Capital Share Transactions
    
42,969,535
    
Increase in Net Assets
    
39,267,437
    
               
NET ASSETS
          
 
Beginning of Period
    
-
    
 
End of Period (Including line (a))
  
$
 39,267,437
    
               
SHARE TRANSACTIONS
          
 
Sale of shares
    
4,681,143
    
 
Reinvestment of distributions
    
8,397
    
 
Redemption of shares
    
(340,478
)
  
Increase in Shares
    
4,349,062
    
               
(a)
Distributions in excess of net investment income
  
$
(45,663
)
  
*
Commencement of operations.
          

 
See Notes to Financial Statements.                                                 10
 
 
 
 
ACUITAS INTERNATIONAL SMALL CAP FUND
FINANCIAL HIGHLIGHTS



These financial highlights reflect selected data for a share outstanding throughout the period.
   
July 18, 2014 (a)
through
December 31, 2014
  
INSTITUTIONAL SHARES 
        
NET ASSET VALUE, Beginning of Period 
$
10.00
    
INVESTMENT OPERATIONS
        
Net investment income (b)
  
 0.01
    
Net realized and unrealized loss
  
 (0.96
)
  
Total from Investment Operations
  
 (0.95
)
  
DISTRIBUTIONS TO SHAREHOLDERS FROM
        
Net investment income
  
 (0.02
)
  
REDEMPTION FEES (b)
  
—
(c)
NET ASSET VALUE, End of Period 
$
9.03
    
TOTAL RETURN
  
(9.52
)%(d)
  
RATIOS/SUPPLEMENTARY DATA
        
Net Assets at End of Period (000's omitted)
$39,267
    
Ratios to Average Net Assets:
        
Net investment income 
  
0.18
%(e)
Net expenses 
  
1.50
%(e)
Gross expenses (f)
  
2.37
%(e)
PORTFOLIO TURNOVER RATE
  
53
%(d)
           
(a)
Commencement of operations.
(b)
Calculated based on average shares outstanding during the period.
(c)
Less than $0.01 per share.
(d)
Not annualized.
(e)
Annualized.
(f)
Reflects the expense ratio excluding any waivers and/or reimbursements.

 
See Notes to Financial Statements.                                                 11
 
 
 
 
ACUITAS US MICROCAP FUND
PERFORMANCE CHART AND ANALYSIS
DECEMBER 31, 2014


The following chart reflects the change in the value of a hypothetical $100,000 investment in Institutional Shares, including reinvested dividends and distributions, in Acuitas US Microcap Fund (the “Fund”) compared with the performance of the benchmark, Russell Microcap® Index (“Russell Microcap”), since inception. The Russell Microcap is an unmanaged index that measures the performance of the microcap segment of US equity market, which consists of the smallest 1,000 securities in the Russell 2000® Index and the next 1,000 smallest eligible securities by market capitalization. The total return of the Russell Microcap includes the reinvestment of dividends and income. The total return of the Fund includes operating expenses that reduce returns, while the total return of the Russell Microcap does not include expenses. The Fund is professionally managed while the Russell Microcap is unmanaged and is not available for investment.
 



Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than original cost. For the most recent month-end performance, please call (844) 805-5628. Shares redeemed within 60 days of purchase will be charged a 1.00% redemption fee. As stated in the Fund's prospectus, the annual operating expense ratios (gross) for Institutional and Investor Shares are 2.16% and 2.97%, respectively. The Fund's adviser has contractually agreed to waive its fee and/or reimburse expenses to limit total annual fund operating expenses (excluding all taxes, interest, portfolio transaction expenses, acquired fund fees and expenses, proxy expenses and extraordinary expenses) to 1.70% and 1.95% for Institutional and Investor Shares, respectively,  through November 1, 2015. The Fund may repay the Adviser for fees waived and expenses reimbursed pursuant to the expense cap if such payment (1) is made within three years of the fee waiver or expense reimbursement, (2) is approved by the Board of Trustees and (3) does not cause the net annual fund operating expenses of the Fund class to exceed the expense cap in place at the time the fees were waived. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
 
 
12
 
 
 
 
ACUITAS US MICROCAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2014

 

 
Shares
  
Security
Description
  
Value
  

Common Stock - 94.8%
Consumer Discretionary - 14.4%
 
17,632
  
Build-A-Bear Workshop, Inc. (a)
$
354,403
  
 
4,396
  
Core-Mark Holding Co., Inc.
  
272,244
  
 
46,440
  
Crown Crafts, Inc.
  
357,588
  
 
23,150
  
Culp, Inc.
  
501,892
  
 
6,254
  
Ethan Allen Interiors, Inc.
  
193,687
  
 
19,555
  
Jamba, Inc. (a)
  
295,085
  
 
17,349
  
MDC Partners, Inc., Class A
  
394,169
  
 
18,700
  
Modine Manufacturing Co. (a)
  
254,320
  
 
4,400
  
Perry Ellis International, Inc. (a)
  
114,092
  
 
1,000
  
Saga Communications, Inc., Class A
  
43,480
  
 
18,893
  
Sequential Brands Group, Inc. (a)
  
246,932
  
 
5,500
  
Sonic Automotive, Inc., Class A
  
148,720
  
 
61,000
  
Tandy Leather Factory, Inc. (a)
  
550,830
  
 
4,100
  
The Marcus Corp.
  
75,891
  
 
6,200
  
Tower International, Inc. (a)
  
158,410
  
 
7,750
  
Winmark Corp.
  
673,630
  
   
4,635,373
  
Consumer Staples - 5.6%
 
17,600
  
ACCO Brands Corp. (a)
  
158,576
  
 
3,300
  
Calavo Growers, Inc.
  
156,090
  
 
12,166
  
Carriage Services, Inc.
  
254,878
  
 
9,200
  
Central Garden and Pet Co., Class A (a)
  
87,860
  
 
6,500
  
Global Cash Access Holdings, Inc. (a)
  
46,475
  
 
20,950
  
John B Sanfilippo & Son, Inc.
  
953,225
  
 
13,546
  
SunOpta, Inc. (a)
  
160,520
  
   
1,817,624
  
Energy - 1.2%
 
5,800
  
Natural Gas Services Group, Inc. (a)
  
133,632
  
 
29,849
  
PetroQuest Energy, Inc. (a)
  
111,635
  
 
2,500
  
REX American Resources Corp. (a)
  
154,925
  
   
400,192
  
Financial - 15.6%
 
7,600
  
Apollo Residential Mortgage, Inc. REIT
  
119,852
  
 
33,600
  
Arbor Realty Trust, Inc. REIT
  
227,472
  
 
29,200
  
Atlas Financial Holdings, Inc. (a)
  
476,544
  
 
11,300
  
Berkshire Hills Bancorp, Inc.
  
301,258
  
 
32,650
  
Customers Bancorp, Inc. (a)
  
635,369
  
 
1,847
  
Diamond Hill Investment Group, Inc. (a)
  
254,960
  
 
9,200
  
Excel Trust, Inc. REIT
  
123,188
  
 
2,400
  
Financial Institutions, Inc.
  
60,360
  
 
14,400
  
First Merchants Corp.
  
327,600
  
 
9,200
  
JMP Group, Inc.
  
70,104
  
 
14,200
  
MainSource Financial Group, Inc.
  
297,064
  
 
4,650
  
Merchants Bancshares, Inc.
  
142,430
  
 
66,100
  
MicroFinancial, Inc.
  
674,550
  
 
3,200
  
Piper Jaffray Cos. (a)
  
185,888
  
 
6,400
  
Premier Financial Bancorp, Inc.
  
99,712
  
 
19,911
  
Pzena Investment Management, Inc., Class A
  
188,358
  
 
38,000
  
Resource Capital Corp. REIT
  
191,520
  
 
13,200
  
Stock Yards Bancorp, Inc.
  
440,088
  
 
12,600
  
Walker & Dunlop, Inc. (a)
  
221,004
  
   
5,037,321
  
Healthcare – 19.7%
 
4,917
  
ABIOMED, Inc. (a)
  
187,141
  
 
32,200
  
Addus HomeCare Corp. (a)
  
781,494
  
 
19,100
  
Affymetrix, Inc. (a)
  
188,517
  
 
2,000
  
Almost Family, Inc. (a)
  
57,900
  
 
1,800
  
AMAG Pharmaceuticals, Inc. (a)
  
76,716
  
 
8,000
  
Amicus Therapeutics, Inc. (a)
  
66,560
  

 
 
Shares
  
Security
Description
  
Value
  
 
 
3,700
  
Ardelyx, Inc. (a)
$
69,893
  
 
11,602
  
BioDelivery Sciences International, Inc. (a)
  
139,456
  
 
2,000
  
BioSpecifics Technologies Corp. (a)
  
77,240
  
 
10,900
  
Cambrex Corp. (a)
  
235,658
  
 
8,709
  
Capital Senior Living Corp. (a)
  
216,941
  
 
4,100
  
Eagle Pharmaceuticals, Inc. (a)
  
63,550
  
 
2,500
  
Emergent Biosolutions, Inc. (a)
  
68,075
  
 
51,100
  
Enzo Biochem, Inc. (a)
  
226,884
  
 
34,400
  
Harvard Bioscience, Inc. (a)
  
195,048
  
 
12,700
  
Heska Corp. (a)
  
230,251
  
 
4,600
  
Infinity Pharmaceuticals, Inc. (a)
  
77,694
  
 
2,900
  
MacroGenics, Inc. (a)
  
101,703
  
 
16,911
  
Natus Medical, Inc. (a)
  
609,472
  
 
32,568
  
NeoGenomics, Inc. (a)
  
135,809
  
 
15,282
  
Omega Protein Corp. (a)
  
161,531
  
 
11,000
  
PharMerica Corp. (a)
  
227,810
  
 
3,500
  
Prothena Corp. PLC (a)
  
72,660
  
 
400
  
Receptos, Inc. (a)
  
49,004
  
 
10,472
  
Repligen Corp. (a)
  
207,346
  
 
34,300
  
SciClone Pharmaceuticals, Inc. (a)
  
300,468
  
 
10,200
  
Skilled Healthcare Group, Inc. (a)
  
87,414
  
 
2,825
  
T2 Biosystems, Inc. (a)
  
54,353
  
 
47,193
  
TearLab Corp. (a)
  
125,061
  
 
6,668
  
The Providence Service Corp. (a)
  
242,982
  
 
9,200
  
Triple-S Management Corp., Class B (a)
  
219,972
  
 
7,450
  
US Physical Therapy, Inc.
  
312,602
  
 
8,100
  
Utah Medical Products, Inc.
  
486,405
  
   
6,353,610
  
Industrial - 17.2%
 
3,140
  
ArcBest Corp.
  
145,602
  
 
7,568
  
Bel Fuse, Inc.
  
206,909
  
 
20,100
  
Blount International, Inc. (a)
  
353,157
  
 
15,500
  
Chase Corp.
  
557,845
  
 
12,700
  
Core Molding Technologies Inc (a)
  
177,165
  
 
6,500
  
Ducommun, Inc. (a)
  
164,320
  
 
2,248
  
DXP Enterprises, Inc. (a)
  
113,591
  
 
13,750
  
Graham Corp.
  
395,587
  
 
3,342
  
Huron Consulting Group, Inc. (a)
  
228,559
  
 
4,100
  
Lydall, Inc. (a)
  
134,562
  
 
10,660
  
Marten Transport, Ltd.
  
233,028
  
 
5,300
  
MFRI, Inc. (a)
  
37,153
  
 
4,902
  
NCI Building Systems, Inc. (a)
  
90,785
  
 
7,207
  
Newport Corp. (a)
  
137,726
  
 
1,300
  
Patrick Industries, Inc. (a)
  
57,174
  
 
5,500
  
Quad/Graphics, Inc.
  
126,280
  
 
24,087
  
Quality Distribution, Inc. (a)
  
256,286
  
 
2,700
  
Standex International Corp.
  
208,602
  
 
53,800
  
Transcat, Inc. (a)
  
541,766
  
 
8,923
  
Tutor Perini Corp. (a)
  
214,777
  
 
44,477
  
UFP Technologies, Inc. (a)
  
1,093,467
  
 
1,100
  
VSE Corp.
  
72,490
  
   
5,546,831
  
Information Technology - 11.6%
 
28,500
  
Alpha & Omega Semiconductor, Ltd. (a)
  
252,225
  
 
55,600
  
American Software, Inc., Class A
  
506,516
  
 
18,100
  
Callidus Software, Inc. (a)
  
295,573
  
 
56,300
  
Ciber Inc (a)
  
199,865
  
 
4,700
  
DTS, Inc. (a)
  
144,525
  
 
27,570
  
inContact, Inc. (a)
  
242,340
  
 
6,500
  
Insight Enterprises, Inc. (a)
  
168,285
  
 
24,600
  
Lattice Semiconductor Corp. (a)
  
169,494
  
 
19,331
  
Maxwell Technologies, Inc. (a)
  
176,298
  
 
49,800
  
Merge Healthcare, Inc. (a)
  
177,288
  
 

 
See Notes to Financial Statements.                              13
 
 
 
 
ACUITAS US MICROCAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2014



 
Shares
  
Security
Description
  
Value
  
 
 
9,119
  
Monotype Imaging Holdings, Inc.
$
262,901
  
 
12,837
  
PDF Solutions, Inc. (a)
  
190,758
  
 
5,647
  
Proofpoint, Inc. (a)
  
272,355
  
 
4,799
  
Qualys, Inc. (a)
  
181,162
  
 
3,422
  
SPS Commerce, Inc. (a)
  
193,788
  
 
12,900
  
Sykes Enterprises, Inc. (a)
  
302,763
  
   
3,736,136
  
Materials - 2.9%
 
46,250
  
Landec Corp. (a)
  
638,712
  
 
24,300
  
Mercer International, Inc. (a)
  
298,647
  
   
937,359
  
Telecommunication Services - 6.6%
 
8,300
  
Black Box Corp.
  
198,370
  
 
29,076
  
Boingo Wireless, Inc. (a)
  
223,013
  
 
6,100
  
Comtech Telecommunications Corp.
  
192,272
  
 
25,147
  
Dice Holdings, Inc. (a)
  
251,722
  
 
29,867
  
Entravision Communications Corp., Class A
  
193,538
  
 
11,600
  
Inteliquent, Inc.
  
227,708
  
 
10,933
  
Perficient, Inc. (a)
  
203,682
  
 
19,881
  
Premiere Global Services, Inc. (a)
  
211,136
  
 
86,400
  
TeleCommunication Systems, Inc., Class A (a)
  
269,568
  
 
43,700
  
Vonage Holdings Corp. (a)
  
166,497
  
   
2,137,506
  
Total Common Stock
(Cost $28,473,811)
  
30,601,952
  
 
Investment Companies - 1.5%
 
4,026
  
PowerShares S&P SmallCap Health Care Portfolio
  
240,513
  
 
1,295
  
SPDR S&P Biotech ETF
  
241,699
  
Total Investment Companies
(Cost $439,588)
  
482,212
  
 
Money Market Fund - 3.5%
 
1,129,784
  
Short-Term Investments Trust Liquid Asset Portfolio, 0.01% (b) (Cost $1,129,784)
  
1,129,784
  
Total Investments - 99.8%
(Cost $30,043,183)*
  $ 32,213,948  
Other Assets & Liabilities, Net – 0.2%
    73,327  
Net Assets – 100.0%
  $  32,287,275  
 
 
 
ETF
Exchange Traded Fund
PLC
Public Limited Company
REIT
Real Estate Investment Trust
(a)
Non-income producing security.
(b)
Variable rate security. Rate presented is as of December 31, 2014.
 
* 
Cost for federal income tax purposes is substantially the same as for financial statement purposes and net unrealized appreciation consists of:
 
Gross Unrealized Appreciation
  
$
3,318,274
  
Gross Unrealized Depreciation
    
(1,147,509
)
Net Unrealized Appreciation
  
$
2,170,765
  

 
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in Note 2 of the accompanying Notes to Financial Statements.
 
The following is a summary of the inputs used to value the Fund’s investments as of December 31, 2014.
 
Valuation Inputs
  
Investments in Securities

Level 1 - Quoted Prices
  
$
31,084,164
  
Level 2 - Other Significant Observable Inputs
    
1,129,784
  
Level 3 - Significant Unobservable Inputs
    
    -
  
Total
  
$
32,213,948
  
 
 
The Level 1 value displayed in this table is Common Stock and Investment Companies. The Level 2 value displayed in this table is a Money Market Fund. Refer to the Schedule of Investments for a further breakout of each security by industry.
 
The Fund utilizes the end of period methodology when determining transfers. There were no transfers among Level 1, Level 2 and Level 3 for the period ended December 31, 2014.
 
PORTFOLIO HOLDINGS
      
% of Total Investments
      
Consumer Discretionary
     14.4 %
Consumer Staples
     5.7 %
Energy
     1.3 %
Financial
     15.6 %
Healthcare
     19.7 %
Industrial
     17.2 %
Information Technology
     11.6 %
Materials
     2.9 %
Telecommunication Services
     6.6 %
Investment Companies
     1.5 %
Money Market Fund
     3.5 %
      100.0 %
 

 
See Notes to Financial Statements.                              14
 
 
 
 
ACUITAS US MICROCAP FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2014

 
             
ASSETS
        
 
Total investments, at value (Cost $30,043,183)
  
$
32,213,948
  
 
Receivables:
        
   
Fund shares sold
    
87,960
  
   
Investment securities sold
    
34,847
  
   
Dividends
    
20,524
  
 
Prepaid expenses
    
135
  
 
Deferred offering costs
    
33,443
  
Total Assets
    
32,390,857
  
             
LIABILITIES
        
 
Payables:
        
   
Investment securities purchased
    
59,204
  
 
Accrued Liabilities:
        
 
Investment adviser fees
    
21,428
  
   
Trustees’ fees and expenses
    
964
  
   
Fund services fees
    
6,790
  
   
Other expenses
    
15,196
  
Total Liabilities
    
103,582
  
             
NET ASSETS
  
$
 32,287,275
  
             
COMPONENTS OF NET ASSETS
        
 
Paid-in capital
  
$
30,765,845
  
 
Accumulated net investment loss
    
(50,096
)
 
Accumulated net realized loss
    
(599,239
)
 
Net unrealized appreciation
    
2,170,765
  
NET ASSETS
  
$
32,287,275
  
SHARES OF BENEFICIAL INTEREST AT NO PAR VALUE (UNLIMITED SHARES AUTHORIZED)
    
3,083,543
  
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE*
  
$
10.47
  
*
Shares redeemed or exchanged within 60 days of purchase are charged a 1.00% redemption fee.
        
 


 
See Notes to Financial Statements.                              15
 
 
 
 
ACUITAS US MICROCAP FUND
STATEMENT OF OPERATIONS
PERIOD ENDED DECEMBER 31, 2014



               
INVESTMENT INCOME
          
 
Dividend income (Net of foreign withholding taxes of $907)
  
$
168,199
    
Total Investment Income
    
168,199
    
           
EXPENSES
          
 
Investment adviser fees
    
179,772
    
 
Fund services fees
    
58,808
    
 
Custodian fees
    
7,065
    
 
Registration fees
    
2,243
    
 
Professional fees
    
12,591
    
 
Trustees' fees and expenses
    
2,464
    
 
Offering costs
    
29,095
    
 
Miscellaneous expenses
    
19,321
    
Total Expenses
    
311,359
    
 
Fees waived and expenses reimbursed
    
(93,064
)
  
Net Expenses
    
218,295
    
               
NET INVESTMENT LOSS
    
(50,096
)
  
               
NET REALIZED AND UNREALIZED GAIN (LOSS)
          
 
Net realized loss on investments
    
(599,239
)
  
 
Net change in unrealized appreciation (depreciation) on investments
    
2,170,765
    
NET REALIZED AND UNREALIZED GAIN
    
1,571,526
    
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
  
$
 1,521,430
    
               
*
Commencement of operations was July 18, 2014.
          

 
See Notes to Financial Statements.                                                 16
 
 
 
 
ACUITAS US MICROCAP FUND
STATEMENT OF CHANGES IN NET ASSETS



       
July 18, 2014* through
December 31, 2014
  
OPERATIONS
          
 
Net investment loss
  
$
(50,096
)
  
 
Net realized loss
    
(599,239
)
  
 
Net change in unrealized appreciation (depreciation)
    
2,170,765
    
Increase in Net Assets Resulting from Operations
    
1,521,430
    
               
CAPITAL SHARE TRANSACTIONS
          
 
Sale of shares
    
31,320,346
    
 
Redemption of shares
    
(555,456
)
  
 
Redemption fees
    
955
    
Increase in Net Assets from Capital Share Transactions
    
30,765,845
    
Increase in Net Assets
    
32,287,275
    
               
NET ASSETS
          
 
Beginning of Period
    
-
    
 
End of Period (Including line (a))
  
$
32,287,275
    
               
SHARE TRANSACTIONS
          
 
Sale of shares
    
3,139,784
    
 
Redemption of shares
    
(56,241
)
  
Increase in Shares
    
3,083,543
    
               
*
Commencement of operations.
          

 
See Notes to Financial Statements.                                                 17
 
 
 
 
ACUITAS US MICROCAP FUND
FINANCIAL HIGHLIGHTS



These financial highlights reflect selected data for a share outstanding throughout the period.
   
July 18, 2014 (a)
through
December 31, 2014
  
INSTITUTIONAL SHARES 
        
NET ASSET VALUE, Beginning of Period 
$
10.00
    
INVESTMENT OPERATIONS
        
Net investment loss (b)
  
 (0.02
)
  
Net realized and unrealized gain (loss)
  
 0.49
    
Total from Investment Operations
  
 0.47
    
REDEMPTION FEES (b)
  
—
(c)
NET ASSET VALUE, End of Period 
$
10.47
    
TOTAL RETURN
  
4.70
%(d)
  
RATIOS/SUPPLEMENTARY DATA
        
Net Assets at End of Period (000's omitted)
$32,287
    
Ratios to Average Net Assets:
        
Net investment loss 
  
(0.40
)%(e)
Net expenses 
  
1.70
%(e)
Gross expenses (f)
  
2.44
%(e)
PORTFOLIO TURNOVER RATE
  
25
%(d)
           
(a)
Commencement of operations.
(b)
Calculated based on average shares outstanding during the period.
(c)
Less than $0.01 per share.
(d)
Not annualized.
(e)
Annualized.
(f)
Reflects the expense ratio excluding any waivers and/or reimbursements.

 
See Notes to Financial Statements.                                                 18
 
 
 
 
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2014


Note 1. Organization
 
Acuitas International Small Cap Fund and Acuitas US Microcap Fund (individually, a “Fund” and, collectively the “Funds”) are diversified portfolios of Forum Funds II (the “Trust”). The Trust is a Delaware statutory trust that is registered as an open-end, management investment company under the Investment Company Act of 1940 (the “Act”), as amended. Under its Trust Instrument, the Trust is authorized to issue an unlimited number of each Fund’s shares of beneficial interest without par value. Each Fund currently offers two class of shares: Institutional Shares and Investor Shares.  As of December 31, 2014, Investor Shares had not commenced operations. Each Fund seeks capital appreciation and commenced operations on July 18, 2014.
 
Note 2. Summary of Significant Accounting Policies
 
These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of increases and decreases in net assets from operations during the fiscal year. Actual amounts could differ from those estimates. The following summarizes the significant accounting policies of each Fund:
 
Security Valuation – Exchange-traded securities and over-the-counter securities are valued using the last quoted trade or official closing price, provided by independent pricing services as of the close of trading on the market or exchange for which they are primarily traded, on each Fund business day. In the absence of a sale, such securities are valued at the mean of the last bid and ask price provided by independent pricing services. Non-exchange traded securities for which quotations are available are valued using the last quoted sales price, or in the absence of a sale, at the mean of the last bid and ask prices provided by independent pricing services. Forward currency contracts are generally valued at the mean of bid and ask prices for the time period interpolated from rates reported by an independent pricing service for proximate time periods. Exchange-traded options for which the last quoted sale price is outside the closing bid and ask price, will be valued at the mean of the closing bid and ask price. Shares of open-end mutual funds are valued at net asset value (“NAV”). Short-term investments that mature in 60 days or less may be valued at amortized cost.
 
Each Fund values its investments at fair value pursuant to procedures adopted by the Trust's Board of Trustees (the "Board") if (1) market quotations are insufficient or not readily available or (2) the adviser believes that the values available are unreliable. The Trust’s Valuation Committee, as defined in each Fund’s registration statement, performs certain functions as they relate to the administration and oversight of each Fund’s valuation procedures. Under these procedures, the Valuation Committee convenes on a regular and ad-hoc basis to review such investments and considers a number of factors, including valuation methodologies and significant unobservable inputs, when arriving at fair value.
 
The Valuation Committee may work with the adviser to provide valuation inputs. In determining fair valuations, inputs may include market-based analytics which may consider related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant investment information. Adviser inputs may include an income-based approach in which the anticipated future cash flows of the investment are discounted in determining fair value. Discounts may also be applied based on the nature or duration of any restrictions on the disposition of the investments. The Valuation Committee performs regular reviews of valuation methodologies, key inputs and assumptions, disposition analysis and market activity.
 
Fair valuation is based on subjective factors and, as a result, the fair value price of an investment may differ from the security’s market price and may not be the price at which the asset may be sold. Fair valuation could result in a different NAV than a NAV determined by using market quotes.
 
Each Fund has a three-tier fair value hierarchy. The basis of the tiers is dependent upon the various “inputs” used to determine the value of each Fund’s investments. These inputs are summarized in the three broad levels listed below:
 
Level 1 — quoted prices in active markets for identical assets and liabilities
 
Level 2 — other significant observable inputs (including quoted prices of similar securities, interest rates, prepayment speeds, credit risk, etc.)
 

 
19
 
 
 
 
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2014

 
Level 3 — significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments)
 
The aggregate value by input level, as of December 31, 2014, for each Fund’s investments is included at the end of each Fund’s schedule of investments.
 
Security Transactions, Investment Income and Realized Gain and Loss – Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as possible after each Fund determines the existence of a dividend declaration after exercising reasonable due diligence. Income and capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable. Interest income is recorded on an accrual basis. Premium is amortized and discount is accreted using the effective interest method. Identified cost of investments sold is used to determine the gain and loss for both financial statement and federal income tax purposes.
 
Foreign Currency Translations – Foreign currency amounts are translated into U.S. dollars as follows: (1) assets and liabilities at the rate of exchange at the end of the respective period; and (2) purchases and sales of securities and income and expenses at the rate of exchange prevailing on the dates of such transactions. The portion of the results of operations arising from changes in the exchange rates and the portion due to fluctuations arising from changes in the market prices of securities are not isolated. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
 
Foreign Currency Transactions – Each Fund may enter into transactions to purchase or sell foreign currency contracts and options on foreign currency. Forward currency contracts are agreements to exchange one currency for another at a future date and at a specified price. A fund may use forward currency contracts to facilitate transactions in foreign securities, to manage a fund’s foreign currency exposure and to protect the U.S. dollar value of its underlying portfolio securities against the effect of possible adverse movements in foreign exchange rates. These contracts are intrinsically valued daily based on forward rates, and a fund’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is recorded as a component of net asset value. These instruments involve market risk, credit risk, or both kinds of risks, in excess of the amount recognized in the Statement of Assets and Liabilities. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movement in currency and securities values and interest rates. Due to the risks associated with these transactions, a fund could incur losses up to the entire contract amount, which may exceed the net unrealized value included in its net asset value. The values of each individual forward currency contract outstanding in Acuitas International Small Cap Fund as of December 31, 2014, are disclosed in Acuitas International Small Cap Fund’s Schedule of Investments.
 
Distributions to Shareholders – Distributions to shareholders of net investment income and net capital gains, if any, are declared and paid at least annually. Distributions to shareholders are recorded on the ex-dividend date. Distributions are based on amounts calculated in accordance with applicable federal income tax regulations, which may differ from GAAP. These differences are due primarily to differing treatments of income and gain on various investment securities held by each Fund, timing differences and differing characterizations of distributions made by each Fund.
 
Federal Taxes – Each Fund intends to continue to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code and to distribute all of their taxable income to shareholders. In addition, by distributing in each calendar year substantially all of their net investment income and capital gains, if any, the Funds will not be subject to a federal excise tax. Therefore, no federal income or excise tax provision is required. Each Fund files a U.S. federal income and excise tax return as required. A fund’s federal income tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed. As of December 31, 2014, there are no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure.
 
Income and Expense Allocation – The Trust accounts separately for the assets, liabilities and operations of each of its investment portfolios. Expenses that are directly attributable to more than one investment portfolio are allocated among the respective investment portfolios in an equitable manner.
 

 
20
 
 
 
 
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2014

 
Redemption Fees – A shareholder who redeems or exchanges shares within 60 days of purchase will incur a redemption fee of 1.00% of the current net asset value of shares redeemed or exchanged, subject to certain limitations. The fee is charged for the benefit of the remaining shareholders and will be paid to each Fund to help offset transaction costs. The fee is accounted for as an addition to paid-in capital. Each Fund reserves the right to modify the terms of or terminate the fee at any time. There are limited exceptions to the imposition of the redemption fee.
 
Offering Costs – Offering costs of $61,661 and $62,538 for the Acuitas International Small Cap Fund and Acuitas US Microcap Fund, respectively, consist of fees related to the mailing and printing of the initial prospectus, certain startup legal costs, and initial registration filings. Such costs are amortized over a twelve-month period beginning with the commencement of operations of the Funds.
 
Commitments and Contingencies – In the normal course of business, each Fund enters into contracts that provide general indemnifications by each Fund to the counterparty to the contract. Each Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against each Fund and, therefore, cannot be estimated; however, based on experience, the risk of loss from such claims is considered remote.
 
Note 3. Fees and Expenses
 
Investment Adviser – Acuitas Investments, LLC (the “Adviser”) is the investment adviser to the Funds. Pursuant to an Investment Advisory Agreement, the Adviser receives an advisory fee at an annual rate of 1.20% and 1.40% of the average daily net assets of Acuitas International Small Cap Fund and Acuitas US Microcap Fund, respectively.
 
Each sub-advisory fee, calculated as a percentage of each Fund’s average daily net assets, is paid by the Adviser.
 
Distribution – Foreside Fund Services, LLC serves as each Fund’s distributor (the “Distributor”). The Funds have adopted a Distribution Plan (the “Plan”) for Investor Shares in accordance with Rule 12b-1 of the Act. Under the Plan, the Funds pay the Distributor and/or any other entity as authorized by the Board a fee of up to 0.25% of the average daily net assets of Investor Shares. The Distributor is not affiliated with the Adviser or Atlantic Fund Administration, LLC (d/b/a Atlantic Fund Services) (“Atlantic”) or their affiliates.
 
Other Service Providers – Atlantic provides fund accounting, fund administration, compliance and transfer agency services to each Fund. Atlantic also provides certain shareholder report production, and EDGAR conversion and filing services. Pursuant to an Atlantic services agreement, each Fund pays Atlantic customary fees for its services. Atlantic provides a Principal Executive Officer, a Principal Financial Officer, a Chief Compliance Officer, and an Anti-Money Laundering Officer to each Fund, as well as certain additional compliance support functions.
 
Trustees and Officers – The Trust pays each Independent Trustee an annual retainer fee of $5,000 for service to the Trust ($20,000 for the Chairman). Effective January 1, 2015, the Trust will pay each Independent Trustee an annual retainer fee of $16,000 for service to the Trust ($21,000 for the Chairman). The Independent Trustees and Chairman may receive additional fees for special Board meetings. Each Independent Trustee is also reimbursed for all reasonable out-of-pocket expenses incurred in connection with his duties as a Trustee, including travel and related expenses incurred in attending Board meetings. The amount of Independent Trustees’ fees attributable to each Fund is disclosed in the Statement of Operations. Certain officers of the Trust are also officers or employees of the above named service providers, and during their terms of office received no compensation from each Fund.
 
Note 4. Expense Reimbursement and Fees Waived
 
The Adviser has contractually agreed to waive its fee and/or reimburse expenses to limit total annual fund operating expenses (excluding all taxes, interest, portfolio transaction expenses, acquired fund fees and expenses, proxy expenses and extraordinary expenses) of Institutional Shares to 1.50% and Investor Shares to 1.75% through November 1, 2015 for Acuitas International Small Cap Fund. The Adviser has also contractually agreed to waive its fees and/or reimburse expenses to limit total annual operating expenses (excluding all taxes, interest, portfolio transaction expenses, acquired fund fees and expenses, proxy expenses and extraordinary expenses) of Institutional Shares to 1.70% and Investor Shares to 1.95% through
 

 
21
 
 
 
 
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2014

 
November 1, 2015 for Acuitas US Microcap Fund. For the period July 18, 2014, through December 31, 2014, the Adviser waived fees and/or reimbursed expenses as follows:
 
   
Investment Adviser Fees Waived
    
Other Waivers
    
Total Fees Waived
  
Acuitas International Small Cap Fund
   $ 124,802     $ 17,682     $ 142,484  
Acuitas US Microcap Fund
     76,056       17,008       93,064  

Each Fund may repay the Adviser for fees waived and expenses reimbursed pursuant to the expense cap if such payment (1) is made within three years of the fee waiver or expense reimbursement (2) is approved by the Board of Trustees and (3) does not cause the net annual fund operating expenses of the Fund class to exceed the expense cap in place at the time the fees were waived. As of December 31, 2014, the following amounts are subject to recapture by theAdviser:

   
Amount of Fees Waived
and/or Expenses Reimbursed
  
Expiration Date to Recoup Fees Waived and/or Expenses Reimbursed
  
Fees Recouped
  
Acuitas International Small Cap Fund
   $ 124,802  
June 30, 2018
   $ -  
Acuitas US Microcap Fund
     76,056  
June 30, 2018
     -  

Note 5. Security Transactions
 
The cost of purchases and proceeds from sales of investment securities (including maturities), other than short-term investments during the period ended December 31, 2014, were as follows:
 
   
Purchases
  
Sales
Acuitas International Small Cap Fund
   $
59,706,810
  
$18,891,058
Acuitas US Microcap Fund
    
36,557,087
  
7,044,448

Note 6. Summary of Derivative Activity
 
The volume of open derivative positions may vary on a daily basis as Acuitas International Small Cap Fund transacts derivative contracts in order to achieve the exposure desired by the Adviser. The notional value of activity for the period ended December 31, 2014, for any derivative type that was held during the period is as follows:
 
Forward Currency Contracts
  
$  19,987,419
    

Acuitas International Small Cap Fund’s use of derivatives during the period ended December 31, 2014, was limited to forward currency contracts.
 
Following is a summary of the effect of derivatives on the Statement of Assets and Liabilities in the Acuitas International Small Cap Fund as of December 31, 2014:
 
Location:
  
Forward Currency
Contracts
  
Asset derivatives:
          
Unrealized gain on forward currency contracts
  
$
64
    

Liability derivatives:
          
Unrealized loss on forward currency contracts
    
(99
)
  


 
22
 
 
 
 
ACUITAS FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2014


Realized and unrealized gains and losses on derivatives contracts during the period ended December 31, 2014, by Acuitas International Small Cap Fund are recorded in the following locations on the Statement of Operations:
 
Location:
  
Forward Currency
Contracts
Net realized gain (loss) on:
        
Foreign currency transactions
  
$
(81,483
)
Total net realized gain (loss)
    
(81,483
)
         
Net change in unrealized appreciation (depreciation) on:
        
Foreign currency translations
    
(35
)
Total net change in unrealized appreciation (depreciation)
    
(35
)

Asset (Liability) amounts shown in the table below represent amounts for derivative related investments at December 31, 2014. These amounts may be collateralized by cash or financial instruments.

   
Gross Asset (Liability) as Presented in the Statements of Assets and Liabilities
  
Financial Instruments (Received) Pledged**
  
Cash Collateral (Received) Pledged**
  
Net Amount
Acuitas International Small Cap Fund
                
Assets:
                                
Over-the-counter derivatives*
  
$
64
    
$
(64
)
  
$
-
    
$
-
  
Liabilities:
                                
Over-the-counter derivatives*
    
(99
)
    
99
                  

*
Over-the-counter derivatives consists of forward currency contracts.  The amounts disclosed above represent the exposure to one or more counterparties.  For further detail on individual derivative contracts and the corresponding unrealized appreciation (depreciation), see the Schedule of Investments.
**
The actual financial instruments and cash collateral (received) pledged may be in excess of the amounts shown in the table. The table only reflects collateral amounts up to the amount of the financial instrument disclosed on the Statements of Assets and Liabilities.

Note 7. Federal Income Tax
 
Distributions paid during the fiscal period ended as noted are characterized for tax purposes as follows:
 
   
Ordinary Income
Acuitas International Small Cap Fund
        
2014
  
$
75,739
  

As of December 31, 2014, distributable earnings (accumulated loss) on a tax basis are  as follows:
 
   
Undistributed Ordinary Income
  
Capital and Other Losses
  
Unrealized Appreciation (Depreciation)
  
Total

Acuitas US Microcap Fund
  
$
-
    
$
(587,425
)
  
$
2,166,173
    
$
1,578,748
  
Acuitas International Small Cap Fund
    
18,355
      
(1,310,989
)
    
(2,409,464
)
    
(3,702,098
)


The difference between components of distributable earnings on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to currency contracts, investments in passive foreign investment companies and wash sales in the Acuitas International Small Cap Fund and real estate investment trusts and wash sales in the Acuitas US Microcap Fund.
 
Note 8. Subsequent Events
 
Subsequent events occurring after the date of this report through the date these financial statements were issued have been evaluated for potential impact and each Fund has had no such events.
 

 
23
 
 
 
 
ACUITAS FUNDS
ADDITIONAL INFORMATION
DECEMBER 31, 2014


 
Investment Advisory Agreement Approval
 
The investment advisory agreements between the investment adviser and the Trust, as well as the subadvisory agreements between the investment adviser and the investment subadvisers, must be approved for initial terms no greater than two years, and must be renewed at least annually thereafter by the vote of the Trustees, including a majority of the Trustees who are not parties to the agreements or “interested persons” of any party thereto (the “Independent Trustees”).
 
On June 12, 2014, the Board met in person, joined by representatives of the Adviser, independent legal counsel to the Independent Trustees (“Independent Legal Counsel”), and others to consider information related to the approval of the investment advisory agreement between the Trust, on behalf of each Fund, and the Adviser as well as the approval of the investment subadvisory agreements between the Adviser and the proposed subadvisers for the Funds (collectively, the “agreements”). The subadvisers of the Acuitas International Small Cap Fund are Advisory Research, Inc., Algert Coldiron Investors, and DePrince, Race & Zollo, Inc. The subadvisers of the Acuitas US Microcap Fund are ClariVest Asset Management, LLC, Falcon Point Capital, LLC, and Opus Capital Management. A description of the Board’s conclusions in approving the agreements follows.
 
In preparation for its June meeting of the Board of Trustees of the Trust (“June Meeting”), the Board was presented with a wide range of information to assist in their deliberations. Those materials included information from Lipper Inc. (“Lipper”), a leading independent source of data about the mutual fund industry, which compared each Fund’s total investment advisory fees and total expenses with a group of peer funds that were selected by Lipper, before and after waivers. Those materials also included a copy of the proposed agreements. The Board considered future potential economies of scale resulting from potential future increases in the size of the Funds and the extent to which it could later be appropriate for some portion of the benefit of these economies of scale to be shared with the Funds’ shareholders. The Board also received a memorandum from Independent Legal Counsel concerning their responsibilities with respect to the approval of the investment advisory agreements, and met in executive session with Independent Legal Counsel while deliberating.
 
The Board also reviewed information that was provided by the Adviser and proposed subadvisers concerning the following:
 
·  
The terms of the proposed agreements, including the fees payable under the agreements, and the commitment  of the Adviser to provide expense caps and fee waivers for the Funds;
·  
The manner in which the Funds’ shares would be distributed and the presence of a distribution fee that could be paid by the Funds;
·  
The nature and extent of the services to be provided by the Adviser and each subadviser, including information about the investment objective, policies and strategies applicable to each Fund;
·  
The personnel of the Adviser and each subadviser, including educational background, experience in the investment management industry, and the ability of the Adviser and each subadviser to retain qualified personnel;
·  
The compliance programs of the Adviser and each subadviser;
·  
The financial condition and stability of the Adviser and each subadviser;
·  
The potential for the Adviser and each subadviser to derive benefits that are ancillary to serving as an investment adviser to the Funds;
·  
The investment performance of the Adviser and the subadvisers with respect to similarly managed accounts, and the investing philosophies of the Adviser and subadvisers;
·  
The profitability of the Adviser from the advisory fee to be paid by each of the Funds.  The Board did not consider information regarding the costs of services provided or profits realized by the subadvisers from their relationships with the Funds, noting instead the arms-length nature of the relationship between the Adviser and each subadviser with respect to the negotiation of the advisory fee rate on behalf of the respective Fund and that the Adviser, and not the respective Fund, was responsible for paying the subadvisory fee due under each subadvisory agreement.
 
At the June Meeting, the Board reviewed, evaluated, and discussed among themselves and with the Adviser and Independent Legal Counsel, among other things, the information referenced above. The Board also considered the overall reputation, capabilities, and commitment of the Adviser and each subadviser to provide high-quality service to the Funds. After discussion and consideration amongst themselves, and with the Adviser and Independent Legal Counsel, the Board concluded that the nature and extent of the investment advisory and subadvisory services to be provided by the Adviser and
 

 
24
 
 
 
 
ACUITAS FUNDS
ADDITIONAL INFORMATION
DECEMBER 31, 2014

 
each subadviser to the Funds would be appropriate and consistent with the terms of the investment advisory and subadvisory agreements, including the amount of fees to be paid under the agreements. At the June Meeting, the Board unanimously approved the investment advisory and subadvisory agreements. The Board agreed that no single factor was determinative of their decision to approve the investment advisory or subadvisory agreements.
 
Proxy Voting Information
 
A description of the policies and procedures that each Fund uses to determine how to vote proxies relating to securities held in each Fund’s portfolio is available, without charge and upon request, by calling (844) 805-5628 and on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. Each Fund’s proxy voting record for the period from the Fund’s commencement of operations to June 30 will be available, without charge and upon request, by calling (844) 805-5628 and no later than August 31 of this year on the SEC’s website at www.sec.gov.
 
Availability of Quarterly Portfolio Schedules
 
Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. These filings are available, without charge and upon request on the SEC’s website at www.sec.gov or may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
 
Shareholder Expense Example
 
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees (for Investor Shares only) and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds, and to compare these costs with the ongoing costs of investing in other mutual funds.
 
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 18, 2014 (commencment of operations), through December 31, 2014.
 
Actual Expenses – The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
 
Hypothetical Example for Comparison Purposes – The second line of the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
 
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.  In addition, if these transactional costs were included, your costs would have been higher.
 

 
25
 
 
 
 
ACUITAS FUNDS
ADDITIONAL INFORMATION
DECEMBER 31, 2014

 
 
Beginning Account Value
July 18, 2014
  
Ending Account Value
December 31, 2014
  
Expenses Paid During Period *
Annualized Expense Ratio *
Acuitas International Small Cap Fund
                      
Actual
$
1,000.00
  
$
904.75
    
$
6.50
  
1.50%
Hypothetical
(5% return before expenses)
$
1,000.00
  
$
1,017.64
    
$
7.63
  
1.50%
Acuitas US Microcap Fund
                      
Actual
$
1,000.00
  
$
1,047.00
    
$
7.91
  
1.70%
Hypothetical
(5% return before expenses)
$
1,000.00
  
$
1,016.64
    
$
8.64
  
1.70%

*  
Expenses are equal to each Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by 365 to reflect the half-year period (except that the average account values reflect the Fund’s actual return information for the 166-day period between July 18, 2014, the commencement date of Fund operations, through December 31, 2014).
 
 
26
 
 
 
 

FOR MORE INFORMATION



Investment Adviser
Acuitas Investments, LLC
520 Pike Street, Suite 1221
Seattle, WA  98101
www.acuitasinvestments.com



Transfer Agent
Atlantic Fund Services, LLC
P.O. Box 588
Portland, ME  04112
www.atlanticfundservices.com



Distributor
Foreside Fund Services, LLC
Three Canal Plaza, Suite 100
Portland, ME  04101
www.foreside.com



Acuitas International Small Cap Fund
Acuitas US Microcap Fund
P.O. Box 588
Portland, ME  04112
(844) 805-5628








This report is submitted for the general information of the shareholders of the Funds.  It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus, which includes information regarding the Funds’ risks, objectives, fees and expenses, experience of its management, and other information.

220-SAR-1214


 
 
 
 


ITEM 2. CODE OF ETHICS.
Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable

ITEM 6. INVESTMENTS.
(a)  
Included as part of report to shareholders under Item 1.
(b)  
Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.

ITEM 8.  PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Registrant does not accept nominees to the board of trustees from shareholders.

ITEM 11. CONTROLS AND PROCEDURES
(a) The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as of a date within 90 days of the filing date of this report.
 
 (b) There were no changes in the Registrant’s internal control over financial reporting (as defined in
Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1)  Not applicable.

(a)(2) Certifications pursuant to Rule 30a-2(a) of the Act, and Section 302 of the Sarbanes-Oxley Act of 2002. (Exhibits filed herewith)

(a)(3)  Not applicable.

(b)      Certifications pursuant to Rule 30a-2(b) of the Act, and Section 906 of the Sarbanes-Oxley Act of 2002. (Exhibit filed herewith)

 
 
 
 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant                      Forum Funds II

By
 /s/ Stacey E. Hong   
 
Stacey E. Hong, Principal Executive Officer
  
     
Date
 2/10/15   

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


By
 /s/ Stacey E. Hong   
 
Stacey E. Hong, Principal Executive Officer
  
     
Date
 2/10/15   


By
 /s/ Karen Shaw   
 
Karen Shaw, Principal Financial Officer
  
     
Date
 2/10/15