For the period ending September 30, 2015, the Fund’s 1-year, 5-year, and since inception (10/17/05) average annual returns for the Investor Class were -10.36%, 3.87%, and 5.14%, respectively, and the 1-year, and since inception (12/30/11) average annual return for the Institutional Class were -10.15%, and 3.33%, respectively. 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 an investor’s shares, when redeemed, may be worth more or less than original cost. Shares redeemed within 60 days of purchase are subject to a 2.00% redemption fee. As stated in the current prospectus, the Fund’s total annual operating expense ratio for Investor Class shares (WGRNX) is 1.89%, and Institutional Class shares (WGRIX) is 1.65%.
Wintergreen Advisers Sees Possible Securities Law Violations at Consolidated?Tomoka
December 17, 2015 12:49PM Eastern Standard Time
New York, NY – (Business Wire) ? Wintergreen Advisers, LLC (“Wintergreen”) today announced that it submitted the following letter to the independent directors of Consolidated?Tomoka Land Company (NYSE:CTO, “CTO”). Wintergreen believes CTO’s recent public filings have not met the standards set forth in various federal securities laws. Furthermore, Wintergreen believes that CTO’s management, led by John Albright, is actively trying to deceive shareholders with filings, investor presentations, and disclosures that obfuscate, confuse and hide what is really going on at CTO, including the trading of a blind pool with borrowed money. Wintergreen believes that CTO’s management violated both the letter and the spirit of multiple laws, and in light of this, expects CTO’s Board of Directors to conduct a thorough and independent inquiry.
December 17, 2015
Consolidated?Tomoka Land Co.
c/o William L. Olivari, Audit Committee Chairman
8 Creekview Way
Ormond Beach, FL 32174
Memorandum to: Consolidated?Tomoka Land Co. Independent Directors
Subject: Possible Violations of Federal Securities Laws
On November 13, 2015, Wintergreen Advisers, LLC sent the independent directors of Consolidated?Tomoka Land Co. (“CTO” or the “Company”) a letter identifying what we view as specific examples of failure at the senior management level. We would like to reiterate those concerns and to discuss them in the context of relevant federal securities laws. We believe CTO management violated both the letter and the spirit of multiple laws, and in light of this, do not understand how CTO’s board of directors (“Board”) can stand by and do nothing. At the very least, we would expect the Board to conduct a thorough and independent inquiry into these matters and to publicly report its findings.
Our overall concerns relate to the requirements of the following significant federal securities laws:
- Sarbanes?Oxley Act of 2002 (“Sarbanes?Oxley”)
- Securities Act of 1933 (the “Securities Act”)
- Securities Exchange Act of 1934 (the “Exchange Act”)
In total, these laws and the rules promulgated there-under require ongoing forthright and complete disclosure of material financial and non?financial information. A company’s management is primarily responsible for ensuring compliance with these laws. We believe CTO’s recent public filings have not met the standards set forth in these federal securities laws and furthermore, we believe that CTO’s management, led by John Albright, is actively trying to deceive shareholders with filings, investor presentations and disclosures that obfuscate, confuse and hide what is really going on at CTO.
For example, in our earlier letter to the Board, we detailed the following issues:
CTO’s Use of and Disclosure Regarding Leverage
Overall, CTO’s long?term debt has increased 44% in 2015 and over 135% since the beginning of 2014. This rapid increase in the use of leverage is extremely alarming to us and we believe it puts the entire Company at risk. In addition, based on CTO’s most recent Form 10?Q, it appears that CTO is making long?term commitments with short?term borrowing, which exposes shareholders to interest rate risk. Furthermore, we believe CTO’s disclosure with regard to its use of leverage is extremely misleading to shareholders and creates the impression that CTO’s low leverage character has not changed. This obfuscation prevents shareholders from fully appreciating what we view as a substantial and radical change to CTO’s business and strategy.
We believe this could create serious potential liability under Rule 10b?5 of the Exchange Act and Item 303 of Regulation S?K under the Securities Act. Rule 10b?5 makes it unlawful for any person to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. Here, in investor presentations, publicly?filed reports and statements certified by Mr. Albright, we believe CTO both mischaracterizes the degree of its use of leverage and fails to adequately disclose material details regarding this leverage. Further, Item 303 of Regulation S?K requires that a company disclose a description of any known trends or uncertainties that it reasonably expects will have a material impact on its business. Here, we believe it is clear that CTO’s increased use of leverage represents a continuing trend and we question how anyone could take the view that a company which increases its leverage to such a degree would not expect that increase to have a material impact on its business. As such, we wonder why there is not significantly more disclosure in this area. It should be noted that the violation of these rules can result in civil or criminal penalties.
CTO’s Calculation of Leverage
In a November presentation, CTO management chose to present leverage ratios against “Total Enterprise Value”. To us, this appears to purposefully understate CTO’s true use of leverage in order to justify increasing leverage. In our opinion, this is extremely dangerous and has the potential to destroy shareholder value because it prevents shareholders from adequately assessing CTO’s risk profile. In fact, if measured against CTO’s Equity Market Capitalization from the same presentation, CTO’s leverage would be an alarming 48%, which could force CTO to sell off its most valuable assets at a steep discount if it is unable to service its debt. Although Mr. Albright recently stated that “[CTO] measures its net asset value on a regular basis and believe[s] that [CTO’s] recent share price is not representative of the net asset value of the Company”, we do not think this justifies creating a reference metric that, in our opinion, omits clear disclosure of CTO’s dramatically increased leverage when measured against CTO’s equity market capitalization.
In addition to Rule 10b?5 and Regulation S?K concerns similar to those discussed above, we believe Mark Patten’s e?mail disclosure that CTO is using hypothetical metrics to measure net asset value is also material. If CTO were to include these hypothetical metrics to measure net asset value in its financial reports without certain clarifications, we believe it could violate various provisions of Sarbanes?Oxley, including Regulation G which states that a company that presents a non?GAAP financial measure is required to compare such measure with the most comparable financial measure that is calculated in accordance with GAAP. In our view, failing to provide such a comparison prevents shareholders from accurately assessing CTO’s leverage. In addition, under Section 302 of Sarbanes?Oxley, the CEO and CFO of a company are required to certify that submitted reports fairly present the financial condition of the company in all material respects and that such reports do not contain any material untrue statements or material omissions