Catalyst Small-Cap Insider Buying Fund CTVAX, CTVCX & CTVIX 2015 Q2

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1 Catalyst Small-Cap Insider Buying Fund CTVAX, CTVCX & CTVIX 2015 Q2

2 About Catalyst Funds Intelligent Alternatives We strive to provide innovative strategies to support financial advisors and their clients in meeting the investment challenges of an ever-changing global market environment. From our founding in 2006, Catalyst Funds set out to be decidedly different. We understood that the market did not need another traditional family of mutual funds. At Catalyst, we endeavor to offer unique investment products to meet the needs of discerning financial advisors and their clients. We offer a broad range of distinctive funds that offer specialized strategies seeking to produce income- and equity-oriented returns while limiting risk and volatility. We offer these exclusive strategies through a team of in-house portfolio managers and boutique institutional investment management partners. Website: Phone: info@catalystmf.com 2

3 CTVAX Fund Overview Small-Cap, Long-Only, U.S. Equity Fund: The Catalyst Small-Cap Insider Buying Fund is a small-cap to micro-cap fund that invests only in companies where corporate insiders are also buying stock Distinctive Strategy: We believe no other mutual funds or ETFs are implementing the corporate insider buying strategy, which has historically outperformed the market over long periods of time Inception: July 31, 2006 Catalyst s flagship fund Management: Managed by David Miller since inception Co-founder and Senior Portfolio Manager of Catalyst Capital Advisors LLC Manages five mutual funds that implement the insider buying strategy B.S. in Economics from the University of Pennsylvania, Wharton School MBA in Finance from the University of Michigan, Ross School of Business Category: Small-Cap Value/Small-Cap Blend 3

4 Corporate Insider Buying Strategy Overview Intuitive Strategy: Corporate insiders, such as the CEO, CFO and directors, likely know more about their own company than anybody else possibly could The people running a company on a day-to-day basis probably know better than anybody else if the company is on track to beat earnings, win some new business or get acquired The only logical reason for corporate insiders to buy their own stock in a meaningful manner is that they believe the stock will outperform the market Tracking Insider Activity: Corporate insiders are legally allowed to buy or sell their own company stock as long as they file a Form 4 with the SEC within two business days Historical Outperformance: Through academic research and our own historical analysis, we have found that investing in situations where multiple executives are all buying a significant number of shares can outperform the market There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. 4

5 Tracking Insider Activity with Form 4 Filings Form 4 filings disclose critical information about the insider buying activity Regulatory changes have accelerated filing requirements for insider transactions Prior to August 29, 2002 Effective August 29, 2002 Effective June 30, 2003 Today Corporate insiders must file a Form 4 with the SEC by the 10 th business day of the month following the transaction With the Sarbanes- Oxley Act, corporate insiders must file a Form 4 with the SEC by the end of the second business day following the transaction All Form 4 filings must be submitted electronically through the SEC EDGAR system Many insiders file immediately upon transacting; data is immediately available for analysis 5

6 CTVAX Investment Process: Use legal information from SEC filings Download Form 4 Filings Proprietary software downloads all Form 4 filings in real time Monitor holdings for changes in insider activity; seek to hold for at least a year but sell if insider activity reverses; seek to stay focused on the best opportunities Active Monitoring Quantitative Screen Quantitative screen filters and ranks all transactions Seek to hold stocks that meet quantitative screen and qualitative review criteria; focus on companies with market cap less than $4 billion; consider both value and growth stocks; limit industry concentration to 25% Portfolio Construction Qualitative Review Management team performs qualitative review for top-ranking stocks in the quantitative screen The above illustration is a general representation of our overall investment process and is not meant to represent fund performance. There is no assurance that any investment process will achieve its investment objective. 6

7 Quantitative Screening: Seeking top executive cluster buy signals Proprietary software downloads and analyzes all Form 4 filings from SEC EDGAR database in real time Signals where top executives (CEO, CFO, COO, CIO, etc.) are buying stock are ranked higher Signals where multiple insiders are buying simultaneously within a short timeframe are ranked higher Signals where insiders are buying a significant number of shares are ranked higher Signals where insiders timed the highs and lows of their stock well in the past are ranked higher The above illustration is a general representation of our overall screening process and is not meant to represent fund performance. There is no assurance that any investment process will achieve its investment objective. 7

8 Qualitative Review: Analyze top-ranking stocks for inclusion Analyze for conflicting buy/sell signals (i.e., when insiders are transacting in opposite directions) Take into consideration any industry trends (i.e., how are insiders behaving in aggregate for the industry) Take into consideration any company trends (i.e., do insiders have a history of buying or selling before certain events) Seek to understand any potential insider motivations (i.e., are the insiders buying as a PR signal or with conviction) The above illustration is a general representation of our overall review process and is not meant to represent fund performance. There is no assurance that any investment process will achieve its investment objective. 8

9 Insider Buying Strategy Example: OvaScience Inc. (OVAS) OVAS insiders have a strong track record of making well-timed purchases (indicated by green symbol) A number of OVAS insiders made significant purchases before key product updates OvaScience is a life sciences company focused on the discovery, development and commercialization of new treatments for infertility that are both cheaper and more effective CEO Michelle Dipp, Chief Scientific Officer Arthur Tzianabos, Chief Commercial Officer Christopher Bleck, and five directors collectively purchased almost $2 million worth of stock After positive updates, including the successful launch of AUGMENT, OVAS s core IVF treatment, OVAS price increased to over $45, significantly higher than where insiders were buying This example given is not meant to represent Fund performance but rather the potential of the insider buying strategy. Past performance is not assurance of future results. 9

10 CTVAX Performance as of June 30, 2015 Growth of $10,000 $22,000 $18,000 $14,000 $10,000 Standard Performance S&P 500 TR Index CTVAX $6, Share Class 1 Year 3 Years 5 Years Since Inception (07/31/2006) Class A % 13.34% 7.46% 6.55% Class C % 12.49% 6.64% 5.82% S&P 500 TR Index 7.42% 17.31% 17.34% 7.81% Russell 2000 TR Index 6.49% 17.81% 17.08% 8.22% Class A with Sales Charge % 11.14% 6.19% 5.85% There is no assurance that the Fund will achieve its investment objective. The Fund s maximum sales charge for Class A shares is 5.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. The Fund s Investment Adviser has contractually agreed to reduce its fees at least until October 31, 2015, to ensure that the net annual fund operating expenses will not exceed 1.50%. Without these waivers, the Fund s total annual operation expenses would be 1.84%, 2.59% and 1.59% for Class A, C, and I shares respectively. To request most recent performance or obtain a prospectus, please call or go to 10

11 CTVAX Portfolio Characteristics as of June 30, 2015 Top Holdings Catalyst Pharmaceuticals Inc 6.9% OvaScience Inc 5.3% Cal-Maine Foods Inc 3.1% MMA Capital Management LLC 2.9% ChannelAdvisor Corp 2.7% Applied Micro Circuits Corp 2.4% Ladenburg Thalmann Financial 2.3% Aegion Corp 2.3% Tronox Ltd 2.1% Greif Inc 2.0% Sector Allocation Health Care 24% Financials 19% Information Technology 17% Industrials 12% Materials 10% Consumer Discretionary 7% Energy 6% Consumer Staples 3% Utilities 2% Fund holdings are subject to change and should not be considered investment advice. 11

12 Key Reasons to Invest Insider Driven: The Fund uses a quantitative methodology that selects for superior information signals, including an evaluation of corporate insider activity; we believe corporate insiders understand their own firm better than any outsider possibly could Disciplined Strategy: The investment process utilizes a quantitative model that ranks stocks based on insider buying activity; the results are then analyzed to ensure the selected stocks meet our investment guidelines Potential Information Advantage: Very small companies tend to have limited to no research coverage or news flow; the absence of information to the market creates potentially great buying opportunities that corporate insiders can identify There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. 12

13 Insider Buying Strategy Mutual Fund Overview Catalyst Insider Buying Fund (INSAX, INSCX, INSIX): Large-cap, long-only equity focused on companies with significant corporate insider buying Catalyst Small-Cap Insider Buying Fund (CTVAX, CTVCX, CTVIX): Small/Micro-cap, long-only equity focused on companies with significant corporate insider buying Catalyst Hedged Insider Buying Fund (STVAX, STVCX, STVIX): Hedged equity portfolio driven by corporate insider knowledge and complemented by put and call options on equity indexes to hedge downside risk and reduce volatility Catalyst Insider Long/Short Fund (CIAAX, CIACX, CIAIX): Market neutral long/short equity with long positions in companies with significant corporate insider buying and short positions in companies with significant corporate insider selling activity Catalyst Insider Income Fund (IIXAX, IIXCX, IIXIX): Focused on short-term U.S. corporate bonds issued by corporations whose executives are purchasing shares of the company s common stock 13

14 Disclosures Alpha: A measure of the difference between a fund's actual returns and its expected performance, given its level of risk as measured by beta. Beta: A measure of a fund's sensitivity to market movements. Correlation: A statistical measure of how two securities move in relation to each other. Long: The buying of a security with the expectation that the asset will rise in value. R-squared: A measure of the relationship between a portfolio and its benchmark. Russell 2000 TR Index: Measures the performance of the small-cap U.S. equity universe. S&P 500 Total Return Index is considered to be generally representative of the U.S. large capitalization stock market as a whole. Sell Short: Any sale that is completed by the delivery of a security borrowed by the seller. Short sellers attempt to buy back at a lower amount than at which they sold short. Investors should carefully consider the investment objectives, risks, charges and expenses of the Catalyst Funds. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling or at The prospectus should be read carefully before investing. The Catalyst Funds are distributed by Northern Lights Distributors, LLC, member FINRA. Catalyst Capital Advisors, LLC is not affiliated with Northern Lights Distributors, LLC. Investing in the Fund carries certain risks. The value of the Fund may decrease in response to the activities and financial prospects of an individual security in the Fund s portfolio. The Fund is non-diversified and may invest a greater percentage of its assets in a particular issue and may own fewer securities than other mutual funds. The performance of the Fund may be subject to substantial short term changes. There are risks associated with the sale and purchase of call and put options. To the extent the Fund invests in the stocks of smaller-sized companies, the Fund may be subject to additional risks, including the risk that earnings and prospects of these companies are more volatile than larger companies. Smaller-sized companies may experience higher failure rates than larger companies and normally have lower trading volume than larger companies. These factors may affect the value of your investment NLD-7/14/