UNITED STATES OF
AMERICA

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549
FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date
of earliest event reported): March 6, 2009
INTEGRITY
MUTUAL FUNDS, INC.
(Exact name of
registrant as specified in its charter)


 
  
  
 
  
  
  
North Dakota
  
  
  
 
  
  
  
0-25958
  
  
  
 
  
  
  
45-0404061
  
  
  
 
  
 
 
  
  
 
  
  
  
(State or other jurisdiction
  of 

  incorporation)
  
  
  
 
  
  
  
(Commission File

  Number)
  
  
  
 
  
  
  
(IRS Employer 

  Identification No.)
  
  
  
 
  
 


 


 
  
  
 
  
  
  
1 Main Street
  North, Minot, North Dakota
  
  
  
 
  
  
  
58703
  
  
  
 
  
 
 
  
  
 
  
  
  
(Address of
  principal executive offices)
  
  
  
 
  
  
  
(Zip Code)
  
  
  
 
  
 


Registrant's
telephone number, including area code: (701) 852-5292
(Former name or
former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:

 
  
  
[ ]
  
  
  
Written communications pursuant to Rule 425 under the
  Securities Act (17 CFR 230.425)
  
 
 
  
  


  [ ]
  
  
  


  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
  240.14a-12)
  
 
 
  
  


  [ ]
  
  
  


  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
  Act (17 CFR 240.14d-2(b))
  
 
 
  
  


  [ ]
  
  
  


  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
  Act (17 CFR 240.13e-4(c))
  
 



Item 1.01 Entry into a Material Definitive Agreement.
Share Purchase Agreement and Change of Advisor.
On March 6, 2009, Integrity
Mutual Funds, Inc. (the Company) and its wholly owned subsidiaries Integrity
Fund Services, Inc., Integrity Funds Distributor, Inc., Integrity Mutual Funds,
Inc. of Nevada, and Integrity Money Management, Inc., together (Seller),
entered into a Share Purchase Agreement and Change Of Advisor (the
"Agreement") with Corridor Investors, LLC, a North Dakota Limited
Liability Company ("Corridor") together with Viking Fund Management, LLC, a
North Dakota LLC ("Viking"), together ("Buyer"), pursuant to which Buyer agrees
to purchase from Seller, and Seller agrees to sell to Buyer: (i) all of the
issued and outstanding shares of each of three subsidiaries of the Company,
Integrity Fund Services, Inc., a share transfer agency, Integrity Funds
Distributor, Inc., a FINRA member broker dealer and Integrity Mutual Funds,
Inc. of Nevada, a non-operating entity (the "Companies'); (ii) all of Seller's
right, title and interest in and to certain tangible assets and (iii) the sale
of certain assets of Integrity Money Management, Inc. related to its mutual
fund advisory business. The purpose of the Agreement is to facilitate a change
in advisor as well as to transfer together with the operating subsidiaries, the
combined mutual fund service business of the Seller currently provided to The
Integrity Funds, Integrity Managed Portfolios, ND Tax-Free Fund, Inc., Montana
Tax-Free Fund, Inc. and Integrity Fund of Funds, Inc. ("the Funds"), which are
investment companies registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940. Integrity Money Management,
Inc. ("Advisor") will not be transferred to Buyer but will assist in good faith
in facilitating the approval of the Funds' Boards and shareholders of the Funds
of new advisory agreement(s) between Viking and the Funds and new sub-advisory
agreement(s) between Viking and any sub-adviser of the Funds, will enter into a
non-compete agreement with the Buyer and will resign effective on the Closing
Date or on such other date as agreed between the parties if the necessary Board
and Fund shareholder approvals are obtained. Advisor will conduct no further
business as an investment or mutual fund advisor. The agreements, contracts,
benefits and day to day responsibilities for services by Integrity Fund
Services, Inc. and Integrity Funds Distributor, Inc. to the Funds are to remain
with Integrity Fund Services, Inc. and Integrity Funds Distributor, Inc. and
therefore such contracts will transfer with Integrity Fund Services, Inc. and
Integrity Funds Distributor, Inc. to the benefit of Buyer as a part of the
Agreement. As the purchase price for the Companies and the business to be
transferred to Buyer, Buyer shall pay in cash: (1) 60 basis points (BPS) of the
aggregate net asset value of the outstanding shares of the Funds on the
business day immediately preceding the Closing Date ("Closing Date
Shares") (the "Initial Purchase Payment") at the time of the Closing
anticipated to be approximately June 30, 2009 and (2) 10 BPS of the then
aggregate net asset value of the Closing Date Shares which then remain
outstanding 12 months post Closing Date, 24 months post Closing Date and 36
months post Closing Date. The closing of the Agreement is conditioned upon the applicable
Funds' shareholders and each of the applicable Funds' Boards granting approval
of the new advisory agreements with Viking, upon the acquisition of Viking by
Corridor and upon the Boards and shareholders of ND Tax-Free Fund Inc. ("NDTAX")
and Montana Tax-Free Fund, Inc. ("MTTAX") approving a reorganization whereby
NDTAX and MTTAX will be combined into similar funds currently advised by Viking
(the "Reorganization"). The Buyer will lease office space from the Company and
services of certain employees of Buyer and Seller will be exchanged in a
cooperative agreement. The Agreement further contains the requirement that
standard representations and warranties be satisfied prior to closing.
The Closing is conditioned upon
the shareholders and Boards of The Integrity Funds, Integrity Managed
Portfolios and Integrity Fund of Funds, Inc. approving Viking as the new
advisor to such Funds and the shareholders and Boards of NDTAX and MTTAX
approving a Reorganization. Shareholders of the individual Funds will be
solicited to approve the change of investment advisor from Advisor to Viking
for The Integrity Funds, Integrity Managed Portfolios and Integrity Fund of
Funds, Inc. by means of a proxy statement (the "Proxy Statement"), the
Reorganization of the NDTAX and MTTAX, respectively, as by means of a Form
N-14. Buyer and Seller shall jointly initiate the generation of the
documentation for the Proxy Statements, Form N-14 and proxy solicitations to
the shareholders of the Funds and cooperate with the Boards of Trustees or
Directors of the Funds in order to accomplish the Funds' and SEC approval of
the transactions described in the Agreement. Buyer and Seller will share
equally the legal and proxy costs of the SEC filing together with any proxy
solicitation costs necessary to obtaining the approval of the shareholders of
the Funds to the change of investment advisor from Advisor to Viking. The
Boards of the Funds shall set a record date for the Fund shareholder vote. Shareholders
of The Integrity Funds, Integrity Managed Portfolios and Integrity Fund of
Funds, Inc. must approve the change of investment advisor from Advisor to
Viking with respect to their Funds in accordance with the respective Fund's
Charter Documents and applicable law. The shareholders of NDTAX and MTTAX,
respectively, must approve the Reorganization of NDTAX and MTTAX, respectively,
including the transactions to be described in the Form N-14 for each merger in
accordance with the respective Fund's Charter Documents and applicable law.
The Agreement was approved by the
Company's Board of Directors on March 5, 2009, subject to the additional Fund
approvals and other conditions of the Agreement. The consent of the
shareholders of the Company is not required for the consummation of the
Agreement. The extent of the assets and revenues to be transferred is not
sufficient to trigger a requirement for shareholder consent under the laws of
North Dakota, the Company's state of incorporation.
The Company's Broker Dealer
business through its wholly owned subsidiary, Capital Financial Services, Inc.
is not being sold or transferred. The Company will continue to operate through
Capital Financial Services, Inc. in its present locations following the
closing.
The amount of proceeds the
Company will receive from the transaction is contingent upon future variables
with respect to net assets of the Funds and is not determinable at the time of
the Agreement. The transaction is subject to receipt of various regulatory
approvals and customary closing conditions and is anticipated to close at the
end of the second quarter.
As a result of the Agreement,
post closing of the transaction, Integrity Fund Services, Inc., Integrity Funds
Distributor, Inc. and Integrity Money Management, Inc. which constitute the
mutual fund division of the Company will be reflected in the Company's future
consolidated financial statements as a discontinued operation.


SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.

 
  
  
 
  
  
  
INTEGRITY MUTUAL FUNDS, INC.
  
 
 
  
  
 
  
  
  
 
  
 
 
  
  
 
  
  
  
By:
  
  
  
/s/Bradley P. Wells
  
 
 
  
  
 
  
  
  
 
  
  
  
Bradley P. Wells
  
 
 
  
  
 
  
  
  
 
  
  
  
Interim CEO & President
  
 

Dated: March 9, 2009