Item 1. Report to Stockholders.

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KINETICS MUTUAL FUNDS, INC.
Shareholders’ Letter

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Dear Fellow Shareholders:

We are pleased to present the Kinetics Mutual Funds (“Fund” or “Funds”) Annual Report for the twelve-month period ended December 31, 2019. One year ago, capital markets were in relative disarray, as the S&P 500 Index declined nearly 20% from peak to trough in the fourth quarter of 2018, while high yield bonds collapsed over 10% during this period and new (non-investment grade) debt issuance all but ceased. In the past year, the S&P 500 Index rose over 31%, and high yield debt rose over 14%, more than erasing the declines of late 2018. Pundits can argue as to the root cause of the decline, and subsequent recovery, but an objective fact is the response of the U.S. Federal Reserve Bank (“Federal Reserve”), which reduced the target overnight rate three times in 2019 – despite the fact that financial markets had already recovered to all-time high levels before the first rate cut. The Federal Reserve communicated its intentions to reduce rates well in advance of the actual cuts, hence restoring the confidence of risk-oriented capital investors. We are more skeptical than the market regarding the sustainability and net benefit of these policies, and we have adjusted our portfolios accordingly. A performance summary follow (No-Load Class) for the fiscal year ended December 31, 2019: The Internet Fund +26.45%; The Global Fund +21.61%; The Paradigm Fund +30.48%; The Medical Fund +16.04%; The Small Cap Opportunities Fund +27.06%; The Market Opportunities Fund +22.76%; The Alternative Income Fund +2.47%; The Multi-Disciplinary Income Fund +9.08%; and the Kinetics Spin-Off and Corporate Restructuring Fund +31.32%. This compares to returns of: +31.49% for the S&P 500 Index; +22.78% for the S&P 600 Small Cap Index; +26.60% for the MSCI All Country World (ACWI) Index; +8.72% for the Bloomberg Barclays U.S. Aggregate Bond Index; +14.32% for the Bloomberg Barclays U.S. Corporate High Yield Bond Index; +5.01% for the Bloomberg Barclays U.S. 1-3 Year Credit Index; +35.23% for the Nasdaq Composite Index; and +22.01% for the MSCI EAFE Index.

While we continue to provide equity and fixed income reference benchmark performance (to aid in your understanding of how broad asset classes have performed throughout the year ended December 31, 2019), we do not manage our Funds against any specific benchmark, nor have we ever done so in the history of the Funds. We believe that such benchmark adherence is highly detrimental to the long-term returns of a sound investment strategy. Furthermore, in both years of positive and negative returns, it should be noted that the Funds generated returns with little to no exposure to the top positions in the major benchmarks.

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The investment team at Horizon Kinetics is widely recognized as being contrarian in our investment process, which produces highly differentiated investments, portfolios and returns. This proclivity towards unconventional thinking is a consequence of our value driven philosophy, as opposed to an underpinning of the investment process. In other words, we are not contrarian for the sake of being contrarian, but rather, we are so due to our price discipline in making investments. In our experience, a company widely thought to be a wonderful investment is seldom available for purchase at a reasonable, let alone a cheap valuation. Hence, whether we agree with conventional wisdom is irrelevant if this optimism is fully discounted into a security price. A security that trades at a reasonable or cheap valuation is generally inexpensive for a specific reason (or perceived reason). If the pessimism is overly discounted in the security price, and/or is not factually grounded, in our view an opportunity exists to purchase the security at an unwarranted discount.

This price discipline has driven the construction and performance of our portfolios over the past several years, despite broad market (beta) exposure and in our opinion, unbridled optimism regarding corporate valuations being consistently rewarded with high absolute returns. We believe that the index (benchmark) performance review should give investors pause, not due to the magnitude of the gains (i.e., the Nasdaq Index +35%), but rather, due to the fact that virtually every asset class generated a positive return last year. Consider that the iShares 20+ Year Treasury Bond ETF, with a portfolio weighted average maturity of 25.52 years in U.S. Treasuries returned over 15% in 2019. This compares to the 30-Year U.S. Treasury offering a yield to maturity of approximately 3% at the outset of the year. That return was generated by declining interest rates and because the yield on a 30-Year U.S. Treasury declined to approximately 2.39% at year-end 2019. This equates to over a 20% decline in the 30-Year yield. This phenomenon has occurred only 5 times in the past 30 years (4 of which were following a global financial crisis), and it coincided with an average equity market return of approximately 8%. In the past 30 years, only one other year has experienced over a 20% decline in 30-year bond yields and over a 20% equity market gain: 1995. In 1995, the U.S. 30-Year Treasury yield declined from 7.89% to 5.96% and the market rose over 34%. This drop in rates catalyzed the technology market’s speculative period leading into 1999-2000, as excess liquidity was directed into rapidly appreciating technology stocks. However, with 6% “risk-free” yields in 30-Year Treasuries and indexation in its infancy, the financial asset inflation was largely isolated to a single niche of stocks.

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The foremost differences at year-end 2019 (as compared to 1995) is the absolute level of interest rates (2.39% 30-Year Yield) and the maturity of indexation. This combination has driven excess liquidity into all financial assets, driving prospective future returns to their lowest levels in history. Accordingly, in our view a pragmatic investment solution for this future would be to focus on something upon which the market places zero focus: inflation. The U.S. 10-Year Inflation Protected Bond (TIPs) is pricing a 10-Year inflation breakeven of approximately 1.8% (note that as of February 18, 2020, the 10-Year Treasury offered a 1.55% yield). While the Consumer Price Index and Personal Consumption Expenditures inflation composites are devoid of financial asset inflation, it appears feasible that a belief in inflation spills into the core consumption items that drive these benchmarks. Should this inflation occur, we believe that most portfolios (particularly those thought to be most conservatively positioned) will be exposed to considerable risks. We seek to offset these risks through companies that are inflation beneficiaries, largely as a function of hard asset bases. This hard asset emphasis is apparent across all of our portfolios, as we believe that these companies can continue to achieve strong performance in a “status quo” environment, but are uniquely positioned should interest rates, inflation and/or economic growth deviate from the current equilibrium.

The returns of financial assets over the past decade have been extraordinary, but in our opinion the current backdrop lacks the preconditions for these returns to be repeated or sustained indefinitely. We are thoughtful regarding our investment decisions, and cash balances in light of this belief. As we enter 2020, we recognize that markets can run further from our determination of fair value, but also, we expect that this decade will be wholly unique from the past decade.

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KINETICS MUTUAL FUNDS, INC.

Investment Commentary

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A cursory review of equity market returns in 2019 would suggest that returns were well diversified across all facets of the U.S. economy. In fact, the average return across the 11 Global Industry Classification Standards (“GICS”) sectors in the S&P 500 Index for the year was over 25%. Furthermore, 9 out of the 11 GICS sectors achieved total returns between approximately 20% and 30% for the year. The outliers were Energy (+7.6%) and Information Technology (+48%). The S&P 500 Index returned over 31% by the year, outperforming the average sector by over 600 basis points by virtue of a 24.5% weighting in Information Technology and a 3.7% weighting in Energy. But even this sectoral analysis fails to fully represent index level drivers; consider the top five companies in the S&P 500 Index (Apple, Microsoft, Alphabet, Amazon and Facebook), which represent approximately 17% of the benchmark. These top 5 constituents rose by an average of nearly 51% for the year (nearly 2,000 basis points over the broader index return), ranging from 23% (Amazon) to 88% (Apple). The performance divide is even more stark in comparison to the S&P 600 Small Cap Index, which returned almost 23% for the year, over 800 basis points below the S&P 500 Index, and 2,800 basis points below the average performance of the top five S&P 500 positions.

This exceptional performance was achieved in a year that “required” the Federal Reserve to reduce overnight lending rates on three separate occasions, amounting to over an 80-basis point reduction in the effective rate (1.56% at year-end). This direct policy easing is addition to what amounted to over $255 billion of “temporary” liquidity outstanding in the U.S. Repurchase Market (“Repo”) at year end. The Federal Reserve is concerted in its effort not to define this as “quantitative easing,” as it is intended to be a temporary activity. This ignores the notion that all of the previous government asset purchases (easing) have been communicated as temporary. While the Federal Reserve did attempt to reduce its balance sheet from a peak of $4.5 trillion (compared to an $890 billion pre-crisis peak), it could only reduce its assets to approximately $3.75 trillion before reversing course, and assets exceeded $4 trillion again by year-end.

In our view, there is a logical inconsistency between declining interest rates and financial market liquidity intervention, along with risk assets (equities, high yield bonds) rising to all-time peak levels. Rather than rejoicing over the market

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returns associated with these policies, we have become increasingly concerned about the sustainability of this process and its various potential unintended consequences. This, coupled with objectively high equity (relative to normalized cash flow) and debt (relative to yields) prices, resulted in sustained defensive positioning of the portfolios in 2019. The limited value opportunities that we can identify in financial markets have been in sectors that are underweight in the major indexes and in smaller companies, both of which are underrepresented in passive fund flows (ETFs). Despite these top-down performance impediments (sector, small cap and cash), the Kinetics Mutual Funds (“Funds”) generated strong gains on an absolute and relative basis driven by specific security selection.

While these performance drivers are shared across various Funds, specific attribution summaries are as follows:

Paradigm Fund – The Fund continued to maintain a defensive cash position and to emphasize companies with strong balance sheets replete with tangible “hard” assets. These allocations generated positive absolute returns but were less than those of the S&P 500 Index. Specific hard asset-oriented companies with operations in energy, precious metals, real estate and infrastructure drove Fund performance, largely outperforming both the broader market and their respective sectors. The large cash position provided nominal income for the year, hence detracting from overall performance relative to a fully invested portfolio, while a small position in oil field services declined for the year and also detracted from returns.

Small Cap Opportunities Fund – The Fund generated strong absolute and relative returns for the year despite a defensive cash position and a concentration in underperforming sectors (energy, real estate and industrials). However, stock selection within these sectors and position weighting drove performance with the top 5 positions returning over 48% on average (more than double the S&P 600 Small Cap Index).

Market Opportunities Fund – The opportunistic nature of the Fund dictated an ultra-defensive positioning for the year, with a very high cash balance awaiting superior investment opportunities. This was ultimately a material headwind to

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returns for the year, despite broader market outperformance achieved by each of the top 5 positions. Specifically, positions in energy, cryptocurrency and Canadian real estate drove Fund returns; it should be noted that these asset classes have minimal or no representation in indexes. Despite the speculative nature of nascent asset classes, we believe that hard assets (specifically cryptocurrency) have the potential to preserve purchasing power, a defensive attribute that is seldom appreciated. The large cash position provided nominal income for the year, hence detracting from overall performance relative to a fully invested portfolio, while certain cyclical companies involved in shipping and oil field services declined and detracted from returns.

Internet Fund – The Fund’s mandate is focused on U.S. and foreign companies engaged in the Internet and Internet related activities and whose businesses are vastly improved through the distribution of content and reduction of costs with the use of the Internet. These sectors are the highest valued sectors in the marketplace based on trailing cash flows. These valuations prompted a degree of diversification away from the core sectors, as well as a defensive cash position, both of which detracted from relative returns. Amongst these investments, specific technology-oriented investments in cryptocurrency, energy and defense companies outperformed even the Nasdaq Composite Index. Consequently, these positions also outperformed large Fund holdings in more traditional “Internet” companies that are leaders in web search and payments. We continue to have high conviction in our unique approach towards investing in Internet/technology beneficiary companies.

Global Fund – The Fund is defensively positioned with a large cash balance, which negatively impacted returns for the year. The global equity landscape is divided between the highest valued, but highest quality companies in the United States, along with much cheaper, but lower quality stocks in foreign developed and emerging markets. Most managers (and indexes) work around this predicament by owning multinational corporations that are only globally diversified insomuch as the country of domicile, as compared to the Fund which focuses on global companies that derive a substantial portion of their revenue from local economies. Domestic oriented corporations held by the Fund detracted from returns, as large multinationals outperformed most

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domestic oriented enterprises. Specific Canadian and British companies held by the Fund involved in precious metals royalties and ship brokerage outperformed on both an aggregate and regional basis.

Medical Fund – The Fund performed largely in line with a composite of U.S. pharmaceutical companies, but it underperformed the broader health care sector due to the lack of exposure to medical equipment and managed care (insurance) companies, both of which are outside the mandate of the Fund. In our view, U.S. pharmaceutical companies continue to offer the best value proposition in the health care universe and are the least exposed to potential regulatory reforms. We continue to view these companies as having robust product pipelines and as attractive long-term compounding investments.

Kinetics Spin-Off and Corporate Restructuring Fund – The Fund generated strong absolute and relative returns for the year, primarily driven by legacy positions with potential future spin-offs or of older vintage. The annual activity for spin-offs continues a recent trend of “asset swapping,” a term that we use for separating business lines with no other motive than seeking higher independent valuations. In past eras the market rewarded scale and diverse business lines, but more recently, it has paid a premium for focused business alignment. A poignant example of this is the Dow/DuPont merger (2017), which has already been reversed through the spin-off of Corteva (agriculture) and Dow (performance materials). To the extent that there is no financial benefit beyond market perception, we find little value in these types of transactions.

Multi-Disciplinary Income Fund – The Fund achieved a respectable return for the year, consistent with a long-term record of exceeding the Bloomberg Barclays U.S. Aggregate Bond Index (lower risk) and underperforming the Bloomberg Barclays U.S. Corporate High Yield Index (higher risk). We believe that the Fund will outperform both benchmarks over a full business cycle when high yield defaults increase, and option premiums rise. Option writing has been minimal throughout the year given suppressed levels of volatility and poor risk-adjusted economics of option exposure. At year end, the CBOE Volatility Index level (an indicator for option pricing) was below 14 and high yield bonds

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offered forward yields of less than 4.5% - these are conditions in which capital preservation should take primacy.

Alternative Income Fund – The Fund utilized selective, conservative option exposure, largely collateralized by cash, to achieve a reasonable net return (yield) of 2.47%. Furthermore, the Fund lived up to its name, with an “alternative” income stream as evidenced by a 0.05 beta relative to the Bloomberg Barclays U.S. Aggregate Bond Index. In the event that there is an eventual end to the current business cycle, we believe that lower short-term rates and higher implied volatility will align well with this strategy.

In aggregate, the Funds performed very well on an absolute basis, and remarkably well on a relative basis given the lack of overlap with holdings in reference benchmarks. We will strive to continue to deliver reasonable returns as the current market cycles sustains itself and expect to truly differentiate our returns in the eventuality that this cycle ends.

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Disclosure

This material is intended to be reviewed in conjunction with a current prospectus, which includes all fees and expenses that apply to a continued investment, as well as information regarding the risk factors, policies and objectives of the Funds. Read it carefully before investing.

Mutual fund investing involves risk. Principal loss is possible. Because The Internet Fund, The Medical Fund and The Market Opportunities Fund invest in a single industry or geographic region, their shares are subject to a higher degree of risk than funds with a higher level of diversification. Internet, biotechnology and certain capital markets or gaming stocks are subject to a rate of change in technology, obsolescence and competition that is generally higher than that of other industries, hence they may experience extreme price and volume fluctuations.

International investing [for all Funds] presents special risks including currency exchange fluctuation, government regulations, and the potential for political and economic instability. Accordingly, the share prices for these Funds are expected to be more volatile than that of U.S.-only funds. Past performance is no guarantee of future performance.

Because smaller companies [for The Small Cap Opportunities Fund] often have narrower markets and limited financial resources, they present more risk than larger, more well established, companies.

Non-investment grade debt securities [for all Funds], i.e., junk bonds, are subject to greater credit risk, price volatility and risk of loss than investment grade securities.

Further, options contain special risks including the imperfect correlation between the value of the option and the value of the underlying asset. Investments [for The Multi- Disciplinary Income Fund and The Alternative Income Fund] in futures, swaps and other derivative instruments may result in loss as derivative instruments may be illiquid, difficult to price and leveraged so that small changes may produce disproportionate losses to the Funds. To the extent the Funds segregate assets to cover derivative positions, they may impair their ability to meet current obligations, to honor requests for redemption and to manage the investments in a manner consistent with their respective investment objectives. Purchasing and writing put and call

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options and, in particular, writing “uncovered” options are highly specialized activities that entail greater than ordinary investment risk.

As non-diversified Funds, except The Global Fund, The Alternative Income Fund and The Multi-Disciplinary Income Fund, the value of Fund shares may fluctuate more than shares invested in a broader range of industries and companies. Unlike other investment companies that directly acquire and manage their own portfolios of securities, The Kinetics Mutual Funds, except Kinetics Spin-Off and Corporate Restructuring Fund, pursue their investment objectives by investing all of their investable assets in a corresponding portfolio series of the Kinetics Portfolios Trust.

The information concerning the Funds included in the shareholder report contains certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Funds. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.

The MSCI All Country World Index, the S&P 500^® Index, NASDAQ Composite^®, S&P 600^® Small Cap Index, MSCI EAFE^® Index, Bloomberg Barclays U.S. 1-3 Year Credit Index, Bloomberg Barclays U.S. Aggregate Bond Index and Bloomberg Barclays U.S. Corporate High Yield Bond Index each represent an unmanaged, broad-basket of stocks or bonds. They are typically used as a proxy for overall market performance.

Distributor: Kinetics Funds Distributor LLC is not an affiliate of Kinetics Mutual Funds, Inc. Kinetics Funds Distributor LLC is an affiliate of Horizon Kinetics Asset Management LLC, Investment Adviser to Kinetics Mutual Funds, Inc.

For more information, log onto www.kineticsfunds.com. January 1, 2020 — Horizon Kinetics Asset Management, LLC^®

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How a $10,000 and $1,000,000 Investment Have Grown:

The charts show the growth of a $10,000 investment in the Feeder Funds and a $1,000,000 investment in The Kinetics Spin-Off and Restructuring Fund (“The Spin-off Fund”) as compared to the performance of one or two representative market indices. The tables below the charts show the average annual total returns on an investment over various periods. Returns for periods greater than one year are average annual total returns. The annual returns assume the reinvestment of all dividends and distributions, however, the graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Past performance is not predictive of future performance. Current performance may be lower or higher than the returns quoted below. The performance data reflects voluntary fee waivers and expense reimbursements made by the Adviser and the returns would have been lower if these waivers and expense reimbursements were not in effect. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original costs.

S&P 500^® Index — is a capital-weighted index, representing the aggregate market value of the common equity of 500 stocks primarily traded on the New York Stock Exchange. The S&P 500^® is unmanaged and includes the reinvestment of dividends and does not reflect the payments of transaction costs and advisory fees associated with an investment in the Funds. The securities that comprise the S&P 500^® may differ substantially from the securities in the Funds’ portfolios. It is not possible to directly invest in an index.

NASDAQ Composite^® — is a broad-based capitalization-weighted index of all NASDAQ stocks. The NASDAQ Composite^® is unmanaged and does not include the reinvestment of dividends and does not reflect the payment of transaction costs or advisory fees associated with an investment in the Funds. The securities that comprise the NASDAQ Composite^® may differ substantially from the securities in the Funds’ portfolios. It is not possible to directly invest in an index.

MSCI ACWI (All Country World Index) Index — is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 46 country indices comprising 23 developed and 26 emerging market country indices. The developed market country indices included are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States. The emerging market country indices included are: Argentina, Brazil, Chile, China, Colombia, Czech

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Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey, and United Arab Emirates. The securities that compromise the MSCI ACWI may differ substantially from the securities in the Funds’ portfolios. It is not possible to directly invest in an index.

S&P 600^® SmallCap Index — measures the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable. The securities that comprise the S&P 600^® may differ substantially from the securities in the Funds’ portfolios. It is not possible to directly invest in an index.

MSCI EAFE^® Index (Europe, Australasia, Far East) — is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. As of June 2, 2014, the MSCI EAFE^® Index consisted of the following 21 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The securities that compromise the MSCI EAFE^® may differ substantially from the securities in the Funds’ portfolio. It is not possible to directly invest in an index.

Bloomberg Barclays U.S. 1-3 Year Credit Index — measures the performance of investment grade corporate debt and sovereign, supranational, local authority and non-U.S. agency bonds that are U.S. dollar denominated and have a remaining maturity of greater than or equal to one year and less than three years. The securities that compromise the Bloomberg Barclays U.S. 1-3 Year Credit Index may differ substantially from the securities in the Funds’ portfolio. It is not possible to directly invest in an index.

Bloomberg Barclays U.S. Aggregate Bond Index — covers the USD-denominated, investment-grade, fixed-rate, taxable bond market of SEC-registered securities. The Index includes multiple types of government and corporate-issued bonds, some of which are asset-backed. The securities that compromise the Bloomberg Barclays U.S. Aggregate Bond Index may differ substantially from the securities in the Funds’ portfolio. It is not possible to directly invest in an index.

Bloomberg Barclays U.S. Corporate High Yield Bond Index —is composed of fixed-rate, publicly issued, non-investment grade debt. The securities that comprise the Bloomberg Barclays U.S. Corporate High Yield Bond Index may differ substantially from the securities in the Funds’ portfolio. It is not possible to directly invest in an index.

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Returns for periods greater than one year are average annual total returns.

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Returns for periods greater than one year are average annual total returns.

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Returns for periods greater than one year are average annual total returns.

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Returns for periods greater than one year are average annual total returns.

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Returns for periods greater than one year are average total returns.

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Returns for periods greater than one year are average total returns.

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Returns for periods greater than one year are average total returns.

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Returns for periods greater than one year are average total returns.

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KINETICS MUTUAL FUNDS, INC. — THE FUNDS

Expense Example

December 31, 2019

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Shareholders incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvestments of dividends or other distributions made by a Fund, redemption fees, and exchange fees, and (2), ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help investors understand the ongoing costs (in dollars) of investing in a series of Kinetics Mutual Funds, Inc. (except the Spin-off Fund, each a “Feeder Fund” and including the Spin-off Fund, collectively the “Funds”), and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested on July 1, 2019 and held for the entire period from July 1, 2019 to December 31, 2019.

Actual Expenses

The Actual Expenses comparison provides information about actual account values and actual expenses. Unlike other mutual funds that directly acquire and manage their own portfolio securities, each Feeder Fund invests all or generally all of its investable assets in a corresponding series of The Kinetics Portfolios Trust (each, a “Master Portfolio”, and together the “Master Portfolios”), a separately registered investment company. The Master Portfolio, in turn, invests in securities. With this type of organization, expenses can accrue specifically to the Master Portfolio or the Feeder Fund or both. Each Feeder Fund records its proportionate share of the Master Portfolio’s expenses, including directed brokerage credits, on a daily basis. Any expense reductions include Fund-specific expenses as well as the expenses allocated from the Master Portfolio. Note, the Spin-off Fund is not a Feeder Fund.

The Funds will charge shareholder fees for outgoing wire transfers, returned checks, and exchanges executed by telephone between a Fund and any other Fund. The Funds’ transfer agent charges a $5.00 transaction fee to shareholder accounts for telephone exchanges between any two Funds. The Funds’ transfer agent does not charge a transaction fee for written exchange requests. IRA accounts are assessed a $15.00 annual fee. Finally, as a disincentive to market-timing transactions, the Funds will assess a 2.00% fee on the redemption or exchange of Fund shares held for less than 30 days. These fees will be paid to the Funds to help offset transaction costs. The Funds reserve the right to waive the redemption fee, subject to their sole discretion, in instances deemed not to be disadvantageous to the Funds or shareholders as described in the Funds’ prospectus.

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KINETICS MUTUAL FUNDS, INC. — THE FUNDS

Expense Example — (Continued)

December 31, 2019

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A shareholder may use the information provided in the first line, together with the amounts invested, to estimate the expenses paid over the period. A shareholder may divide his/her account value by $1,000 (e.g., an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses paid on his/her account during this period.

Hypothetical Example for Comparison Purposes

The Hypothetical Example for Comparison Purposes provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid for the period. A shareholder may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, a shareholder would compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The expenses shown in the table are meant to highlight ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the Hypothetical Example for Comparison Purposes is useful in comparing ongoing costs only, and will not help determine the relative total costs of owning different funds. In addition, if these transactional costs were included, shareholders costs would have been higher.

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