IMS Capital Value Strategy Capturing the Benefits of Mid Cap Stocks

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IMS Capital Management – Firm Overview

Founded in 1988, 20th year in business

Northwest-based, offices in Portland, Oregon, Eugene Oregon and Seattle, Washington

Staff of 15 professionals, 7 investment team members

Independently-owned and operated boutique investment manager

Professional credentials:

CFA® (Chartered Financial Analyst) charter members – 3

Certified Market Technician

Master of Business Administration – 2

Certified Public Accountant

Master of Science

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Experienced Investment Team

CARL W. MARKER – 21 years industry experienceCarl W. Marker, 46, is the founder and president of IMS Capital Management. Mr. Marker received a Bachelor of Science degree from the University of Oregon and has managed the IMS family of no-load mutual funds since inception. He is a member of the Portland Society of Financial Analysts and is frequently interviewed by the national television and print media.

ARTHUR G. NUNES, CMT – 26 years industry experienceMr. Nunes is market strategist, portfolio manager and principal of IMS Capital Management. He co-manages the IMS Strategic Allocation Fund and performs research and technical analysis for the other IMS strategies. He earned a Bachelor of Science degree from Ohio State University. Prior to joining IMS, Mr. Nunes managed fee-based portfolios at RBC Dain Rauscher and Salomon Smith Barney.

JOSEPH M. LEDGERWOOD, CFA – 7 years industry experienceJoseph M. Ledgerwood is a portfolio manager and senior research analyst specializing in equities. Prior to joining IMS, Mr. Ledgerwood gained financial services and investment experience working at a bank and full service brokerage firm. Mr. Ledgerwood graduated from the University of Portland, where he earned a Bachelor of Business Administration degree in Finance. He is member of the Portland Society of Financial Analysts.

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Experienced Investment Team

DON A. SHUTE, CFA – 19 years industry experienceDon Shute is portfolio manager and senior research analyst specializing in fixed income. He previously worked for Bear Stearns Asset Management, GT Capital Management, and Wells Fargo Asset Management performing all aspects of fixed income analysis and portfolio management. His experience includes quantitative risk analysis and modeling, credit analysis, and international market research. A member of the Portland Society of Financial Analysts, Mr. Shute has a Bachelor of Arts degree from the University of Illinois and a Master of Science degree from Utah State University.

STEPHEN WENDELL, CPA – 26 years industry experienceMr. Wendell is the lead portfolio manager for the Focus 30 Strategy and is former president and founder of Juniper Capital, a Eugene-based RIA with $65 million in assets. With 25 years investment management experience, Mr. Wendell has served as a senior financial executive and director of several Oregon-based companies in the public and private sector, including Bohemia, Inc., International Kings Table, Inc., Obie Media, and Umpqua Feather Merchants. Currently Mr. Wendell serves on the Board of Directors of Agate Resources Inc., a Eugene based company developing technology driven solutions for healthcare management. Mr. Wendell received a Bachelor of Science degree in Business Administration from Portland State University and a Master of Business Administration in Finance and Accounting from the University of Oregon.

REID WEAVER – 7 years industry experienceReid Weaver is research analyst and trader for the Focus 30 Strategy. He has been working with Mr. Wendell for the past six years. A Level III CFA candidate, Mr. Weaver has a Bachelor of Science degree from the University of Oregon.

CAMERON K. MARTIN – 13 years industry experienceCameron Martin is a portfolio manager. Prior to joining IMS in 2008, Mr. Martin worked at Smith Barney where he managed discretionary portfolios since 1999 and served as a Financial Advisor since 1996. With 12 years experience in the financial services industry, Mr. Martin graduated from the University of Oregon in 1993.

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Mid Cap Stocks have Improved the Risk/Return Profile of Domestic Equity Portfolios

Data above represents past performance, which does not guarantee future results. The “4 Corners” are represented by equal weights of the Russell 2000 Growth Index (small cap growth), the Russell 2000 Value index (small cap value), the Russell 1000 Growth Index (large cap growth), the Russell 1000 Value Index (large cap value), rebalanced annually. Mid cap stocks are represented by the Russell Mid Cap Index. Alpha and up and down capture figures are calculated relative to the Russell 3000 index, which is considered representative of the entire equity market. Calculations by IMS Capital Management. The Sharpe ratio measures risk adjusted return by subtracting the risk-free rate (3-month Treasury bill) from the rate of return of a portfolio and dividing the result by the standard deviation. Alpha is a measure of “excess return” in an investment. A positive alpha is the extra return realized by taking additional risk rather than accepting the market return. Up and down capture is a measure of how well a portfolio is able to replicate or improve upon positive index returns and how badly a portfolio is affected by negative index returns, respectively.

Year Ending

Average Annual

Total Return (%)

Sharpe Ratio Alpha (%)*

Up Capture (%)*

Down Capture (%)*

2007

4-Corne

rs

4-Corners +Mid

Cap

4-Corne

rs

4-Corners + Mid Caps

4-Corne

rs

4-Corners +Mid

Cap

4-Corne

rs

4-Corner

s + Mid Cap

4-Corne

rs

4-Corners + Mid Cap

20 Years 11.31 11.96 .46 .50 -0.12 .35 99 105 103 102

10 Years 5.86 6.81 .14 .20 0.63 1.27 104 108 103 102

5 Years 12.73 14.01 .86 .92 -1.35 -0.66 101 102 134 1263 Years 4.58 6.18 .04 .17 -2.45 -1.83 92 93 144 136

When mid cap stocks were added to hypothetical portfolios having equal weights of large cap value, large cap growth, small cap value and small cap growth stocks (also known as the “4—corners”), the portfolios demonstrated higher Sharpe Ratios, higher alpha and higher up capture returns than the same hypothetical portfolios without mid cap stocks over the last 3, 5, 10 and 20-year periods ending 2007, as illustrated below.

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IMS Capital Value Strategy – Unique Features

Seeks undervalued mid cap stocks demonstrating signs of positive momentum

Utilizes a “seasoned,” patient approach to stock selection

Utilizes “concentrated diversification”

Concentrates on companies that fall into at least one strategic focus area: technology, healthcare, financial services, consumer, communications/entertainment, defensive industries, consolidating industries.

Sell discipline allows a company to remain in the portfolio as long as its core business is still experiencing positive momentum

Veteran portfolio managers with 28 years combined experience backed by five other investment professionals.

S&P 500 Sector Returns over the 10 years ending 2008

Annualized returns for the last 10 years ended 12/31/08Source: Standard & Poor’s. Past returns are no guarantee of future results.

Energy 9.42%

Materials 2.22%

Utilities 1.68%

ConsumerStaples

1.32%Consumer

Discretiona

ry 1.18%

Industrials 0.17%

Healthcare

–0.85%

Financials

–4.62%

Info Tech -6.26%

Telecomm

–6.97%

Annualized returns for the last 10 years

ended 12/31/08

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Stock Selection Overview--IMS Capital Value Strategy

IMS Proprietary ResearchBusiness Characteristics

Fundamental Value CharacteristicsMomentum Characteristics

SeasoningApply 37-Factor Scoring Model

Stocks in Russell universe with adequate coverage, liquidity – 3,000 Names

Stocks that are mid cap Generally $1.5 to $9.5 billion in market cap

Stocks that have 2 years or more of “seasoning,”are down 30% or more from their highs,

have strong value and momentum characteristics,and fit into at least one of our strategic focus areas

150 Names

Resulting portfolio of 40 to 60 Names

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The IMS Proprietary Scoring Model

Business characteristics considered:

Low capital intensity

Long product cycle

Decreasing capital expenditures

Short consumer repurchase cycle

High barriers to entry

Immunity to product obsolescence

Organic growth

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Fundamental value characteristics considered:

Stocks trading at low price-to-earnings on a historical basis

Stocks trading at low price-to-book on a historical basis

Stocks trading at low price-to-sales on a historical basis

Stocks trading at low price-to-cash flow on a historical basis

Low P/E, P/B, P/S, P/CF vs. industry

Low debt-to-equity % (less than 60%)

Improving margins

Asset turn improvement

Decreasing debt-to-asset %

Companies trading significantly below historical price levels

Companies trading significantly below intrinsic value

The IMS Proprietary Scoring Model

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Momentum characteristics considered:

Positive quarterly earnings surprises

Positive earnings revision trends

Positive relative strength vs. market

Positive new development /catalyst

The IMS Proprietary Scoring Model

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The Value of “Seasoning”

Stocks that are seasoned have been flat to down for a minimum of 2 years.

Companies need time to season or recuperate – they need to mend and begin recovering from whatever caused the decline.

Our internal research determined that 80% of the time, after a significant loss of market cap, a company will not begin to outperform the market on a relative basis -- until at least 2 years on average. Often it takes much longer. We have chosen to implement a minimum seasoning period of 2 years before we will consider buying.

The seasoning discipline helps reduce the chances of being too early and sitting on “dead” money or worse, incurring significant losses after purchase.

Even small and mid cap companies need time to settle shareholder lawsuits, handle product litigation, restate earnings and deal with accounting scandals. Often new management is brought in, legislation is passed to assist an entire industry, or new products need to be developed. These things can take years, not months.

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Portfolio Construction and Risk Controls Remain broadly diversified in all ten major S & P industry

sectors

Initial purchase is in the 1% to 3% range based on scoring model

Allow effective research to have its impact. Practice “concentrated diversification,” holding no more than 40 to 60 names

Stay fully invested (90%+)

Written investment policy statement governs management

of each account

Sell targets are set and monitored daily

Momentum characteristics are monitored weekly

Positions exceeding 10% of portfolio due to appreciation are

reduced within 60 days

Two individuals are involved in every trade

Broad industry and sector diversification is maintained

Sectors making up more than 10% of the Index will

generally carry no more than a 150% weighting in the

Portfolio.

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IMS Capital Value Sector Weightings As of March 31, 2009

Portfolio holdings are subject to change at any time.

16%

20% 20%

11%

6%

2%

0%

14%

13%

18%

15%

4%

1%

15%

7% 7% 7%

0%

2%2%

4%

17%

Tech

nolo

gy

Hea

lthca

re

Fin

ancia

l

Con

sum

er

Discre

tiona

ry

Con

sum

er

Sta

ple

s

Com

mu

nica

tion

Indu

strials

Mate

rials

Utilitie

s

Energ

y

Cash

IMS Capital Value S&P 400 MidCap

24%

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Top Ten HoldingsAs of March 31, 2009

Portfolio holdings are subject to change at any time.

STOCKPERCENTAGE OF PORTFOLIO

Watson Pharmaceuticals, Inc 3.73%

Intuit 3.53%

Check Point Software 3.40%

CenturyTel  3.34%

Safeway Inc. 3.33%

Toll Brothers 3.14%

Biogen 3. 01%

Aon Corp. 2.99%

Tyson 2.94%

H&R Block 2.83%

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Sell Discipline: Most Value Managers Sell Too Early

When a stock reaches our price target and is 10% off its 52 week high (unless the market is also down 10% or more)

Company reaches unsustainable valuations

Industry-wide negative legislation or litigation

A significant change in the company’s management or direction

Company is involved in a merger or acquisition

The emergence of a better opportunity within the same industry

Positions that exceed 10% of the portfolio due to appreciation are lightened within 60 days

Generally sell after two conditions have been met

– Company exceeds its target sell price and

– Company demonstrates a loss of momentum

OTHER SELL TRIGGERS

WHY WE SELL

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Bought 35,000 shares @ $48.60 after a 3-

year seasoning period

Sold 35,000 shares @ $77.44

IMS Capital Value Trading History of Cephalon, Inc. (CEPH)

Past performance is no guarantee of future results. This example should not be considered a recommendation to purchase or trade the stock illustrated. Not all securities in the IMS Capital Value portfolio have gone up in value and some may lose money.

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Portfolio Characteristics As of March 31, 2009

PORTFOLIO CHARACTERISTICS

IMS CAPITAL VALUE PORTFOLIO

Number of Issues 48

Weighted Average Market Cap $2.36 bil.

Forward Price/Earnings Ratio (P/E) 12.27x

Price to Book Value (P/B) 1.1x

Annual Turnover as of 6/30/08 46%

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-8.66

-37.10

-13.16

-2.84

4.20

-11.01

-38.09

-13.05

-4.76-3.00

-38.6

3.82

-15.47

-5.42

-12.53

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Quarter One Year Three Years Five Years Ten Years

Retu

rn

IMS Capital Value S&P MidCap 400 S&P 500

Past performance above does not guarantee future results. Investment return and principal value will fluctuate so that your return, when redeemed, may be worth more or less than original cost. Figures include change in principal value, reinvested dividends and capital gain distributions. Current performance may be lower or higher than that above. Monthly performance is available by calling 1-800-408-8014. The S&P 500 Index is a widely accepted index of large cap stocks and is not available for direct investment. The S&P 400 is a widely recognized unmanaged indices of common stock prices and is representative of a broader market and a broader range of securities than are found in the Fund's portfolio. Individuals cannot invest directly in the Index. Performance figures reflect the change in value of the stocks in the index and reinvestment of dividends..

Annualized Average Total ReturnsAs of March 31, 2009

1.52% - Total Gross Expense Ratio as of August 31, 2008

20

-4.7

-11.1

56.1

12.9 12.1

17.5

-0.6

-14.5

35.6

16.512.6

10.38.0

-36.2

-9.1-11.9

-22.1

28.7

10.9

4.9

15.8

5.5

-37.0-33.4

0.4

10.5

18.8

2000 2001 2002 2003 2004 2005 2006 2007 2008

IMS Capital Value S&P 400 MidCap S&P 500

Calendar Year Returns As of December 31, 2008

Past performance does not guarantee future results. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than original cost. Figures include change in principal value, reinvested dividends and capital gain distributions. Current performance may be lower or higher than that above and is available by calling 1-800-408-8014. The S&P 400 is a widely recognized unmanaged index of mid cap stocks. The Standard & Poor’s 500 is a widely accepted index of large cap stocks. Individuals cannot invest directly in an Index. The indices are representative of a broader market and range of securities than are found in the Fund. Performance figures reflect the change in the value of stocks in the Index and reinvestment of dividends.

1.52% - Total Gross Expense Ratio as of August 31, 2008

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Why IMS Capital Management?

21 years in business

Highly focused and skilled investment team, experienced in both up and down markets

Independently owned and operated investment “boutique”

Highly entrepreneurial culture

Commitment to constantly improving investment process

Recognized in major publications and national media such as Barron’s, Forbes, The Washington Post, The Wall Street Journal, New York Times, Business Week, USA Today, Smart Money and CNBC.

Mission: Deliver exceptional client service, outstanding investment counsel and superior investment returns.

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Representative Institutional Client List

Allergy & Asthma Center PC FreedomWorks FoundationFriends of the Children of Klamath BasinIntrepid Marble and Granite (401k plan) Lathing, Acoustical and Drywall Systems Local 1144McClenahan Bruer Communications

Relief NurseryRon Tonkin Auto Dealer (401k plan)Serenity Lane Health ServicesSky Lakes Medical CenterWorkFirst Casualty Company

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Important Disclosure

Investing in mid caps may be more risky and volatile than investing in large cap stocks. Also, value stocks may underperform other types of stocks during a given period.

Past performance of the IMS Capital Value Fund does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's return, when redeemed, may be worth more or less than original cost. Figures include change in principal value, reinvested dividends and capital gain distributions. Current performance may be lower or higher than that quoted herein. Monthly performance is available by calling 1-800-408-8014 or by visiting www.imscapital.com.

The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other information about the investment company. Please read it carefully before investing. The prospectus is available by calling 503-788-4200 or by visiting www.imscapital.com. Foreside Distribution Services, LP

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