360 Funds Seeks Shareholder Nod for Pinnacle Advisory Deal Post-Acquisition

TL;DR

**Vote FOR the Pinnacle advisory agreement to avoid fund liquidation and ensure seamless management, but watch for recoupment of past waived fees.**

AI Summary

360 Funds is seeking shareholder approval for a new investment advisory agreement with Pinnacle Wealth Advisors, Inc. and a new expense limitation agreement, following Pinnacle's acquisition of current adviser IMS Capital Management, Inc. The current advisory agreement is set to terminate on September 30, 2025, due to a change in control. The new advisory agreement will maintain the same management fee rates: 1.21% for the IMS Capital Value Fund and 1.26% for the IMS Strategic Income Fund. Pinnacle also seeks the ability to recoup previously waived fees and reimbursed expenses under the new expense limitation agreement, which will extend through at least October 31, 2027. The Board unanimously approved both proposals on August 26, 2025, and recommends shareholders vote 'FOR' them to avoid potential fund liquidation if the new agreement is not approved. An interim advisory agreement will manage the funds for up to 150 days if shareholders do not approve Proposal 1 by September 30, 2025, with all management fees held in escrow.

Why It Matters

This proxy statement is crucial for investors as it outlines the continuity plan for 360 Funds' IMS Capital Value Fund and IMS Strategic Income Fund following Pinnacle Wealth Advisors' acquisition of IMS Capital Management. While management fees and investment strategies remain unchanged, the ability for Pinnacle to recoup past waived fees and expenses under the new expense limitation agreement could impact future fund performance and shareholder returns. The Board's recommendation to approve the proposals is critical to avoid potential fund liquidation, ensuring uninterrupted management and stability for existing investors and employees. This move also highlights consolidation trends within the asset management industry, where smaller firms are being absorbed by larger entities like Pinnacle.

Risk Assessment

Risk Level: medium — The risk level is medium because while the core investment strategy and management fees remain unchanged, the potential for Pinnacle to recoup previously waived fees and reimbursed expenses under the new expense limitation agreement introduces a new financial variable for shareholders. If shareholders do not approve the New Advisory Agreement, the Board will consider liquidating the Funds, which presents a high risk of capital loss and disruption for investors.

Analyst Insight

Investors should vote 'FOR' both Proposal 1 and Proposal 2 to ensure the continuity of the IMS Capital Value Fund and IMS Strategic Income Fund, as the alternative could be fund liquidation. However, shareholders should monitor the impact of Pinnacle's ability to recoup past waived fees on the funds' expense ratios going forward.

Key Numbers

• 1.21% — Management fee rate (For IMS Capital Value Fund, unchanged under New Advisory Agreement)
• 1.26% — Management fee rate (For IMS Strategic Income Fund, unchanged under New Advisory Agreement)
• $55,000 — Estimated cost of proxy solicitation (Paid by IMS Capital Management, Inc.)
• September 30, 2025 — Special Meeting Date (Date for shareholder vote and expected termination of Current Advisory Agreement)
• August 26, 2025 — Board Approval Date (Date the Board unanimously approved the New Advisory Agreement and New ELA)
• October 31, 2027 — Expense Limitation Agreement Expiration (Pinnacle commits to maintaining the expense limit through this date)
• 150 days — Duration of Interim Agreement (Maximum period Pinnacle can serve as adviser without shareholder approval)
• February 27, 2026 — Interim Agreement Expiration (End date of the 150-day interim period if transaction closes September 30, 2025)
• 80% — Investment policy threshold (New policy for IMS Capital Value Fund related to 'value' securities)

Key Players & Entities

• 360 Funds (company) — Registrant and Trust for the Funds
• Pinnacle Wealth Advisors, Inc. (company) — Acquiring company and proposed new investment adviser
• IMS Capital Management, Inc. (company) — Current investment adviser being acquired
• Randall K. Linscott (person) — President of 360 Funds
• M3Sixty Administration, LLC (company) — Location of the Special Meeting
• EQ Fund Solutions (company) — Proxy solicitor for IMS
• IMS Capital Value Fund (company) — One of the funds affected by the proposals
• IMS Strategic Income Fund (company) — One of the funds affected by the proposals
• Board of Trustees (regulator) — Unanimously approved the New Advisory Agreement and New ELA
• SEC (regulator) — Regulates the filing of DEF 14A

FAQ

Industry Context

The mutual fund industry is highly regulated, with significant emphasis on transparency and shareholder protection under the Investment Company Act of 1940. Changes in investment adviser relationships, particularly due to acquisitions or mergers, are common and require strict adherence to regulatory protocols, including shareholder votes for new advisory agreements. The industry also faces ongoing pressure on fees and a need for clear communication regarding operational and strategic changes to maintain investor confidence.

Regulatory Implications

The proposed transaction triggers 'change in control' and 'assignment' provisions under the 1940 Act, necessitating shareholder approval for the new advisory agreement. Failure to obtain approval could lead to fund liquidation. The interim agreement and escrow of fees are specific regulatory mechanisms designed to ensure continuity and protect shareholder interests during the approval process.

What Investors Should Do

1. Vote 'FOR' Proposal 1 (New Advisory Agreement) and Proposal 2 (New Expense Limitation Agreement).
2. Review the Proxy Statement thoroughly.
3. Vote by the deadline of September 30, 2025.

Key Dates

• 2025-09-30: Special Meeting Date — Shareholders vote on new advisory and expense limitation agreements; expected termination date of current advisory agreement.
• 2025-08-26: Board Approval Date — The Board of Directors unanimously approved the New Advisory Agreement and New Expense Limitation Agreement.
• 2027-10-31: Expense Limitation Agreement Expiration — Pinnacle Wealth Advisors commits to maintaining the expense limitation through this date.
• 2025-09-30: Current Advisory Agreement Termination — Expected termination due to change in control following Pinnacle's acquisition of IMS.
• 2025-10-28: Value Fund Prospectus Amendment Effective Date — New 80% investment policy for 'value' securities, unrelated to the transaction.

Glossary

DEF 14A

A filing with the U.S. Securities and Exchange Commission (SEC) that provides detailed information for a shareholder meeting, typically concerning mergers, acquisitions, or other significant corporate actions. (This document is the proxy statement detailing the proposals shareholders are being asked to vote on.)

Investment Advisory Agreement

A contract between an investment company (like a mutual fund) and an investment adviser, outlining the terms and conditions under which the adviser manages the company's assets. (Shareholders are voting on a new agreement with Pinnacle Wealth Advisors, Inc. to manage the Funds.)

Expense Limitation Agreement

An agreement where an investment adviser agrees to waive fees or reimburse expenses to limit the fund's total operating expenses to a certain percentage of its assets. (Shareholders are voting on a new agreement that includes Pinnacle's ability to recoup previously waived fees and reimbursed expenses.)

Change in Control

A significant event that alters the ownership or control of a company, often triggering termination clauses in existing contracts. (The acquisition of IMS Capital Management by Pinnacle Wealth Advisors constitutes a change in control, necessitating the termination of the current advisory agreement.)

Assignment

In the context of investment company regulations, the transfer of an advisory contract to a new adviser, which typically requires shareholder approval. (The change in control triggers an automatic assignment of the current advisory agreement, requiring shareholder approval for the new agreement.)

1940 Act

The Investment Company Act of 1940, a U.S. federal law that regulates the organization of companies, including mutual funds, closed-end funds, and unit investment trusts, and their obligations to shareholders. (Key provisions of the 1940 Act mandate shareholder approval for new advisory agreements following a change in control and govern interim advisory agreements.)

Interim Agreement

A temporary agreement put in place to ensure continuity of services while a permanent agreement is pending approval. (An interim advisory agreement with Pinnacle will be in effect if shareholders do not approve the new advisory agreement by September 30, 2025.)

Recoupment of Fees/Expenses

The ability for an investment adviser to recover fees that were previously waived or expenses that were reimbursed under a prior agreement. (Pinnacle seeks approval to recoup fees waived and expenses reimbursed by IMS under the current expense limitation agreement.)

Year-Over-Year Comparison

This filing is a definitive proxy statement (DEF 14A) related to a specific corporate event: the acquisition of the current investment adviser, IMS Capital Management, by Pinnacle Wealth Advisors. As such, it does not present comparative financial metrics like revenue growth or net income from a previous year's filing. Instead, it focuses on the procedural and governance aspects of the proposed change in advisory services and the associated agreements, highlighting the continuity of management fees and the need for shareholder approval.

Key Financial Figures

• $55,000 — h soliciting proxies are expected to be $55,000. Q. Are there any material differenc

Filing Documents

• ims-def14a_093025.htm (DEF 14A) — 262KB
• image_001.jpg (GRAPHIC) — 92KB
• image_003.jpg (GRAPHIC) — 7KB
• image_004.jpg (GRAPHIC) — 7KB
• image_005.jpg (GRAPHIC) — 7KB
• ims_001.jpg (GRAPHIC) — 100KB
• ims_002.jpg (GRAPHIC) — 35KB
• ims_003.jpg (GRAPHIC) — 35KB
• ims_004.jpg (GRAPHIC) — 9KB
• 0001999371-25-013198.txt ( ) — 665KB
• S000045520
• C000141714 (IMSCX)
• S000045521
• C000141715 (IMSIX)

From the Filing

DEF 14A 1 ims-def14a_093025.htm DEFINITIVE PROXY STATEMENTS UNITED SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A INFORMATION Proxy Filed by the Registrant Filed by a Party other than the Registrant Check the appropriate box: Preliminary Proxy Statement Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material Pursuant to Sec. 240.14a-12 360 Funds (Name of Registrant as Specified in Its Charter) (Name of Person(s) Filing Proxy Statement, if other than Registrant) Payment of Filing Fee (Check the appropriate box): No fee required. Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 1) Title of each class of securities to which transactions applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: Fee paid previously with preliminary materials. Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identity the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule, or Registration Statement No.: 3) Filing Party: 4) Date Filed: 360 Funds IMS Capital Value Fund and IMS Strategic Income Fund (the “Funds”) 4300 Shawnee Mission Parkway, Suite 100 Fairway, Kansas 66205 September 15, 2025 Dear Shareholders: The enclosed Proxy Statement contains information about a proposal (“Proposal 1”) to approve a new investment advisory agreement (the “New Advisory Agreement”) between 360 Funds (the “Trust”), on behalf of the Funds, and Pinnacle Wealth Advisors, Inc. (“Pinnacle”); and a proposal (“Proposal 2”, and together with Proposal 1, the “Proposals”) to approve a new expense limitation agreement between the Fund and Pinnacle (the “New ELA”), including Pinnacle’s ability to recoup amounts that the current investment adviser previously waived or reimbursed under the current expense limitation agreement. Shareholders will vote on the Proposals at a Special Meeting to be held on September 30, 2025, at 10:00 a.m. Central Time at the offices of M3Sixty Administration, LLC, 4300 Shawnee Mission Parkway, Suite 100, Fairway, KS 66205. IMS Capital Management, Inc. (“IMS”) is the current investment adviser to the Funds under an investment advisory agreement between the Trust and IMS (the “Current Advisory Agreement”). The Current Advisory Agreement is expected to terminate on or about September 30, 2025, because Pinnacle is acquiring IMS, resulting in a change in control that will result in the assignment of the Current Advisory Agreement under federal securities laws (the “Transaction”). The Transaction will have no bearing on the daily operations or management team of IMS, other than becoming a part of Pinnacle. On August 26, 2025, the Board unanimously approved a New Advisory Agreement and New ELA with Pinnacle, subject to shareholder approval. Also on August 26, 2025, the Board unanimously approved an interim investment advisory agreement between the Trust and Pinnacle, which will go into effect on the Transaction’s closing date (the “Closing Date”), if shareholders do not approve Proposal 1 on September 30, 2025, or the Special Meeting is adjourned to a later date. The New Advisory Agreement is identical to the Current Advisory Agreement, including the same management fee rate, except for the named investment adviser and commencement and renewal dates. To allow Pinnacle to serve as the Funds’ investment adviser without interruption, shareholders are asked to approve the New Advisory Agreement. Regarding Proposal 2, Pinnacle has committed to continue the expense limitation arrangement with the Funds through at least October 31, 2027, but wants the ability to recoup previously waived fees and reimbursed expenses under the current expense limitation agreement between the Trust and IMS. Pinnacle believes this is appropriate since it is acquiring IMS’ assets and equity. The current expense limitation agreement will automatically terminate upon the assignment of the Current Advisory Agreement. If shareholders approve Proposal 1, but not Proposal 2, then the New Advisory Agreement will take effect along with the New ELA, but the New ELA will not allow for the recoupment of fee waivers or expense reimbursements paid under the prior expense limitation agreement. The Bo

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