UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-23011

PENN CAPITAL FUNDS TRUST
(Exact name of registrant as specified in charter)

Navy Yard Corporate Center
1200 Intrepid Ave., Suite 400
Philadelphia, Pennsylvania 19112
(Address of principal executive offices) (Zip code)

Richard A. Hocker
Navy Yard Corporate Center
1200 Intrepid Ave., Suite 400
Philadelphia, Pennsylvania 19112
(Name and address of agent for service)

With copies to:

Lisa L.B. Matson, Esq.
Navy Yard Corporate Center
1200 Intrepid Ave., Suite 400
Philadelphia, Pennsylvania 19112

Michael P. O’Hare, Esq.
Stradley Ronon Stevens & Young, LLP
2005 Market Street, Suite 2600
Philadelphia, Pennsylvania 19103

(215) 302-1500
Registrant's telephone number, including area code

Date of fiscal year end: June 30, 2019

Date of reporting period: June 30, 2019

PENN CAPITAL FUNDS TRUST
PRESIDENT’S LETTER TO SHAREHOLDERS (UNAUDITED)

Dear Penn Capital Funds Shareholder:

The Penn Capital Funds recently celebrated their three-year anniversary milestone. Our current fund line-up embodies our investment philosophy and our dedicated research-driven process. I would like to take this opportunity to thank our shareholders for entrusting their investments with our firm. Our team remains committed to focusing our efforts on behalf of our shareholders, and we value your confidence in our vision.

Our investment strategies incorporate Penn Capital’s Complete Capital Structure Analysis^®, an in-depth high yield and equity research philosophy used to identify a company’s optimal capital structure. Our investment professionals are capital structure generalists, meaning they are responsible for understanding the entire capital structure of the companies they follow. By following this philosophy, we believe that integrating credit and equity research allows us to construct a more comprehensive investment mosaic. Participating in both credit and equity markets, along with this integrated research process, provides Penn Capital’s investment team with what we believe is an informational advantage. Finding inefficiencies in the market can be challenging, but we remain committed to the pursuit of strong investment returns on behalf of our shareholders.

Finally, I am excited to share Penn Capital’s continued expansion of our philanthropic endeavors and support for diversity in the financial services industry. Penn Capital’s PRIME program sponsors a three-year financial literacy and investing curriculum for female high school students in Philadelphia. The PRIME Internship is entering its second year with a six-month internship to a collegiate female majoring in business or finance. We are excited about these PRIME endeavors, which reflect our firm’s commitment to gender and racial diversity in our industry.

The following pages review the current market environment and provide additional insight into our funds and their performance over the past fiscal year. Once again, I would like to thank you for your confidence in investing with us.

Overview

During 2018, the Federal Reserve (“Fed”) raised interest rates four times, but the federal funds rate has settled at 2.25-2.50% as of June 30, 2019. Trade clashes between the US and Chinese governments dominated headlines late in 2018 as concerns regarding a tightening monetary policy sparked sharp risk aversion during the fourth quarter of 2018. During this turbulent period, global supply chains were reexamined as the potential tariff regime required companies to contemplate moving product sourcing, raising prices, or absorbing higher costs that typically reduce profit margins. However, trade fears abated early 2019 as optimism grew regarding positive US-China trade discussions, while a more dovish Fed signaled an end to the tightening cycle with no anticipated interest rate increases for the remainder of 2019. During the first quarter of 2019, the Fed announced it would cease the drawdown of the central bank’s bond holdings as of September 2019.

During the fiscal year, the 10-year US Treasury yield declined from 2.87% to 2.00% as economic concerns mounted. After spreads touched post-Lehman lows in the third quarter of 2018, and then hit almost +550 basis points at year-end, they rallied back to +400 basis points as of June 30, 2019. As the fiscal period neared its end, we witnessed commodity market turbulence returning; however, the housing market took its cue from interest rates and performed well, as did the retail sector. Consumers appeared to be resilient whereas corporations clearly became more uncertain of their spending plans and some continued to rehash their supply chains.

Looking ahead, we believe the domestic economy remains stable, supported by low unemployment, improving wage growth, improving confidence, low interest rates, and rising home values. However, we are cautious that earnings growth is decelerating as we lap those benefits derived from the 2018 Tax Cuts & Jobs Act. A moderate pace of economic expansion sets the stage for a continuation of the current credit cycle. We expect high yield spreads to drift lower, which is supportive of equity valuations.

At this point in the economic cycle, we believe quality of corporate credit issuance needs to be monitored for possible deterioration, which would signal a downturn in the credit cycle. Key downside risks to this outlook in our opinion include a re-escalation of trade tensions, a Fed policy mistake, further Washington dysfunction, and slowing economic conditions outside the US (China in particular). Strategic decisions based on recent tariff instability can cause short term disruptions for companies that could lead to operations that are marginally more insulated from future geopolitical events.

The following paragraphs provide more detailed information on the performance of our funds, as well as selected holdings, during the reporting period.

Penn Capital Defensive Floating Rate Income Fund

For the fiscal year ended June 30, 2019, the Penn Capital Defensive Floating Rate Income Fund (the “Floating Rate Income Fund”) generated a 4.04% return versus 4.05% for its benchmark, the S&P/LSTA BB Loan Index. Three-month LIBOR surrendered all gains realized through December 2018 and finished the period down two basis points at fiscal year end. In response to the decline in LIBOR, retail investors redeemed $20b from loan funds during the first six months of the 2019 calendar year, creating a performance headwind versus longer duration fixed income asset classes like high yield and investment grade bonds. The Floating Rate Income Fund is managed with a conservative bias, prioritizing preservation of principal as opposed to reaching for yield. To meet that objective, the strategy does not invest in triple C-rated or 2nd lien loans, as both areas of the market are exposed to a greater risk of impairment and volatility. With bonds outperforming loans over the last fiscal year, the Floating Rate Income Fund’s allocation to high yield bonds, nearly 12% of assets, contributed positively to performance. The Floating Rate Income Fund holds conservative short duration high yield bonds to enhance liquidity as opposed to increasing yield or risk.

The Floating Rate Income Fund’s investments in Telecom and Transportation sectors were positive contributions to performance whereas Midstream/Energy Infrastructure and Basic Materials investments lagged. Top single name contributors to performance were XO Jet and WideOpen West. The Floating Rate Income Fund’s investment in XO Jet was repaid as part of a global refinancing transaction. Top single name detractors included Maxar Technologies and Keane Group. Both names triggered our sell discipline threshold and were exited as of fiscal year end. We continue to be selective for inclusions in the Floating Rate Income Fund given that we believe we are in the latter stages of the current credit cycle and are most focused on risk-adjusted, rather than absolute, returns.

Penn Capital Defensive Short Duration High Income Fund

For the fiscal year ended June 30, 2019, the Penn Capital Defensive Short Duration High Income Fund (the “Short Duration Fund”) generated a 4.65% return, underperforming its benchmark, the ICE BofAML 1-3 Year BB-Rated US Cash Pay High Yield Index, which returned 6.37%. The Short Duration Fund maintains an average portfolio maturity of three years or less and excludes triple C-rated bonds. The Short Duration Fund finished the fiscal year with a positive return that approximates the average coupon of its underlying investments.

During the fiscal year, performance was negatively impacted by both an overweight allocation (compared to the index) and security selection within the commodity-oriented sectors of Energy and Metals & Mining. Lower oil and gas prices and a prolonged “Trade War” with China raised concerns regarding global demand and the ability of these companies to refinance their short-term debt. Commodity-oriented companies such as Nabors Industries, Unit Corp, Carrizo, and Ryerson Holding Corporation were all weaker earlier in the fiscal year before bouncing (partially) back by period end. Additionally, the Short Duration Fund was conservatively positioned towards Financials and Retail & Apparel, which rallied during the period. Whereas the Media sector was a detractor in the last fiscal year, the Short Duration Fund was able to add value this fiscal year in part due to a rally in Dish Network Corporation, which benefitted from a large contract resolution and from the value of its spectrum. Positive contributions to performance were found in security selection within Healthcare and Utilities sectors, which outperformed most particularly in hospital companies such as HCA Healthcare and Tenet Health. During the fiscal year, the Short Duration Fund held an average weighting of 2% in cash and 15% in bank loan securities via exposure from a combination of individual bank loan holdings and investment in the Penn Capital Defensive Floating Rate Income Fund. Our loan positions were a detractor to performance and we gradually decreased our overall weighting throughout the fiscal year with a final ending weight of approximately 8% of total net assets. Despite falling for most of calendar year 2019, 1-month LIBOR finished the fiscal year +30 basis points. We continue to believe that a complementary allocation to bank loans is prudent given their security within capital structures.

Penn Capital Multi-Credit High Income Fund

For the fiscal year ended June 30, 2019, the Penn Capital Multi-Credit High Income Fund (the “High Income Fund”) generated a 5.83% return, underperforming the 7.56% return of the ICE BofAML US High Yield Constrained Index, but outperforming the 5.81% return of the 50% ICE BofAML High Yield Constrained Index -50% S&P/LSTA BB Loan Index. In a rotation toward preservation of principal, the High Income Fund increased its leveraged loans allocation throughout the year, finishing with a 40% loan weighting. This shift ultimately disadvantaged performance as falling interest rates and a Fed induced rally benefitted long duration fixed income at the expense of floating rate loans. Despite the expectation for LIBOR to fall further in tandem with Fed rate cuts, we remain optimistic on loans given their senior position in the capital structure while offering comparable yields to unsecured high yield bonds. Loans may also insulate investors from near record negative convexity in high yield bonds, which leaves premium callable bonds, particularly long maturity low-coupon double B-rated credits, vulnerable to extension risk in a selloff. In conjunction with that view, the High Income Fund remained overweight single B-rated bonds and underweight double B-rated bonds during the period. The High Income Fund also remained underweight triple C bonds as a late cycle precaution.

The largest positive performance contributors during the fiscal year were found through security selection in the Energy E&P, Energy Services, and Food & Beverage sectors. Investment in these areas outperformed as a result of strong credit selection. An investment in Simmons Foods, a domestic value-added poultry processor, was the most significant contributor to performance and remains a core holding in the High Income Fund. The company is in the final stages of a capital investment program that will increase their capacity and cash flow generation while management is also executing a cost cutting plan. The High Income Fund also benefitted from an overweight investment in Gogo, which successfully executed a refinancing transaction that extended their debt maturity profile and alleviated near term restructuring concerns. We believe the company is well positioned to grow its commercial aviation segment to sustainable profitability while the bonds remain fully covered by the value of Gogo’s business aviation segment. Telecommunication and Healthcare sector investments contributed the greatest share of negative performance during the period. Several natural gas producers, in particular Comstock, Covey Park, and Montage, came under significant pressure as a result of weak domestic gas prices. In fact, Covey Park and Comstock have announced a plan to merge. At fiscal year end, the High Income Fund reduced exposure to gas names in favor of oil while maintaining the High Income Fund’s underweight to the sector. Within Healthcare, an underweight position to HCA detracted from performance after the company’s secured credit ratings were upgraded to investment grade. The High Income Fund gradually increased its exposure to HCA, but remains underweight the hospital industry within the Healthcare sector.

Penn Capital Managed Alpha SMID Cap Equity Fund

For the fiscal year ended June 30, 2019, the Penn Capital Managed Alpha SMID Cap Equity Fund (the “Managed Alpha SMID Fund”) generated a 3.64% return outperforming the 1.77% return of its benchmark, the Russell 2500^™ Index. Positive performance resulted from selections in the Communication Services, Energy, and Consumer Discretionary sectors, which were driven by favorable bottom-up stock selection. In the Communication Services sector, the Managed Alpha SMID Fund benefited from holding IAC, which enjoyed growth via its subsidiary Match Group and which continues to trade at a significant discount to the sum of its parts. In addition, the Managed Alpha SMID Fund’s performance was further supported by the successful merger of HomeAdvisor with Angie’s List. In the Energy sector, our focus on companies with low cost structures and strong balance sheets provided outperformance as oil prices weakened in the fourth quarter of 2018. In the Consumer Discretionary sector, Roku, Inc., a streaming video player manufacturer, performed well for the second consecutive year as users continued to adopt their over-the-top solution and consumed more streaming hours.

Despite the Managed Alpha SMID Fund outperforming its benchmark for the fiscal year, certain sectors including Financial Services, Consumer Staples, and Industrials hindered overall relative performance. In Financial Services, regional banks struggled as interest rates peaked in the fourth quarter of 2018, placing intermediate term pressure on net interest margins. In Consumer Staples, Lamb Weston struggled as industry announcements of additional potato processing plant capacity additions raised concerns regarding pricing and margin dynamics. In the Industrials sector, Schneider National experienced a weaker trucking price environment as the industry adapted to tighter driver regulations and underlying demand softened due to slowing trade activity.

Penn Capital Special Situations Small Cap Equity Fund

For the fiscal year ended June 30, 2019 the Penn Capital Special Situations Small Cap Equity Fund (the “Special Situations Fund”) generated a -7.91% return underperforming the -3.31% return of its benchmark, the Russell 2000^® Index. Energy, Financials, and Consumer Discretionary sectors led the performance detractors. Within Energy, underperformance was driven by the significant decline in crude oil prices during the fiscal year ending June 30, 2019. Further, the sharp widening of credit spreads in the fourth quarter of 2018 resulted in an out-sized negative impact on smaller capitalization energy companies that feature higher balance sheet leverage. Banks were pressured throughout the fiscal year as the flattening yield curve compressed net interest margins and investors worried that slowing economic conditions would eventually impact credit quality and loan growth. Texas Capital Bancshares’ results missed street expectations due to increased charge-offs in its commercial loan book. Management forecasts slowing loan growth as they tighten lending standards. Within Consumer Discretionary, casino operators and gaming equipment suppliers underperformed due to a soft patch in the Las Vegas market during the latter half of 2018 amid increased economic uncertainty. G-III Apparel Group continued to report strong sales, earnings, and free cash flow, yet shares plunged in May 2019 amid increased trade tensions with China (where the company sources most of its goods).

Healthcare, Communications Services, and Materials sectors contributed positively to performance reflecting favorable sector allocation as well as positive stock selection. Omnicell, a provider of software solutions for healthcare facilities, delivered robust sales and earnings growth driven by an increase in larger, multi-product platform bookings. Within Communications Services, the television broadcasters broadly outperformed due to improving core advertising trends, optimism regarding the outlook for 2020 political advertising, and increased merger & acquisition activity. Within Materials, mining company Cleveland-Cliffs benefitted from strong end-market demand for steel, favorable iron ore, and pellet pricing on the back of capacity reduction stemming from a leading mining company. This benefitted the company with improved margins and cash flow funding, incremental share repurchasing, and initiation of a new dividend.

Looking Forward

This report contains performance data and financial information. Please keep in mind that all securities markets, as well as mutual fund prices, fluctuate in value. If you would like more frequent updates, http://www.penncapitalfunds.com provides daily NAV, monthly performance figures, portfolio holdings, and other valuable information. We encourage you to visit penncapitalfunds.com, through which you may access your account, buy and sell shares, and find other helpful tools.

At Penn Capital Funds, we believe that active management continues to serve as a critical element of investing in high yield debt securities and equity securities of smaller and mid-sized companies. Although challenges remain, and markets may continue to be uneven, we are confident that investors with a well-diversified portfolio and a patient, long-term outlook should be well positioned for the years ahead.

We thank you for investing with us and look forward to continuing to serve your investment needs.

Sincerely,

Richard A. Hocker

Chairman & President

PENN Capital Funds Trust

This letter reflects Penn Capital’s analysis and opinions as of the most recent fiscal year-end. The information is not a complete analysis of any market, country, industry, security, or fund and should not be considered as a recommendation to buy, sell or hold any specific security or securities.

All investments involve risk, including possible loss of principal, and there is no guarantee the Funds will achieve their investment objectives. Investments made in small and mid-capitalization companies may be more volatile and less liquid due to limited resources or product lines and more sensitive to economic factors. Investments in ETFs are subject to the same risks as the underlying securities in which the ETF invests as well as entails higher expenses than if invested into the underlying ETF directly. Investments in foreign securities and ADRs involve certain risks such as currency volatility, political and social instability and reduced market liquidity. As interest rates rise the value of bond prices will decline. Credit risk refers to the loss in the value of a security based on a default in the payment of principle and/or interest of the security, or the perception of the market of such default. High-yield bonds have a higher risk of default or other adverse credit events, but have the potential to pay higher earnings over investment grade bonds. The value of convertible securities tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying securities. Bank loans in which the Fund may invest have similar risks to below investment grade fixed income securities. In the event of the insolvency of an agent bank, a loan could be subject to settlement risk as well as the risk of interruptions in the administrative duties performed in the day to day administration of the loan.

Index Definitions

The ICE BofAML US High Yield Constrained Index contains all securities in the ICE BofAML US High Yield Index but caps issuer exposure at 2%.

The ICE BofAML 1-3 Year BB-Rated US Cash Pay High Yield Index is a subset of the ICE BofAML US Cash Pay High Yield Index, which tracks the performance of non-investment-grade corporate bonds with a remaining term to final maturity less than three years and rated BB.

The S&P/LSTA BB Loan Index is a market value-weighted index designed to measure the performance of the US leveraged loan market and is comprised of loans whose rating is BB+, BB, BB-.

The S&P/LSTA Leveraged BB/B Loan Index is a market value-weighted index designed to measure the performance of the US leveraged loan market and is comprised of loans whose rating is BB+, BB, BB-, B+, B or B-. Standard & Poor’s Rating Services is used to determine membership within this sub-index.

The Russell 2000^® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 is a subset of the Russell 3000^® Index representing approximately 10% of the total market capitalization of that index. It includes

approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000 Index is constructed to provide a comprehensive and unbiased small-cap opportunity barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.

The Russell 2500^™ Index is composed of the bottom 500 stocks in the Russell 1000^® Index and all the stocks in the Russell 2000^® Index. The Russell 2500^™ Index return reflect adjustments for income dividends and capital gains distributions reinvested as of the ex-dividend dates.

PENN CAPITAL MANAGED ALPHA SMID CAP EQUITY FUND
FUND SUMMARY (UNAUDITED)

This chart assumes an initial gross investment of $10,000 made on December 1, 2015, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index. No information is provided for Investor Class shares because shares of that class had not yet been issued as of June 30, 2019.

PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND
FUND SUMMARY (UNAUDITED)

This chart assumes an initial gross investment of $10,000 made on December 18, 2015, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index. No information is provided for Investor Class shares because shares of that class had not yet been issued as of June 30, 2019.

PENN CAPITAL MULTI-CREDIT HIGH INCOME FUND
FUND SUMMARY (UNAUDITED)

This chart assumes an initial gross investment of $10,000 made on December 1, 2015, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index. No information is provided for Investor Class shares because shares of that class had not yet been issued as of June 30, 2019.

PENN CAPITAL DEFENSIVE FLOATING RATE INCOME FUND
FUND SUMMARY (UNAUDITED)

This chart assumes an initial gross investment of $10,000 made on December 1, 2015, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index. No information is provided for Investor Class shares because shares of that class had not yet been issued as of June 30, 2019.

PENN CAPITAL DEFENSIVE SHORT DURATION HIGH INCOME FUND
FUND SUMMARY (UNAUDITED)

This chart assumes an initial gross investment of $10,000 made on July 17, 2017, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index.

PENN CAPITAL FUNDS TRUST
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
FOR THE SIX MONTH PERIOD FROM JANUARY 1, 2019 TO JUNE 30, 2019

Cost in Dollars of a $1,000 Investment in Penn Capital Managed Alpha SMID Cap Equity Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from January 1, 2019 to June 30, 2019, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees on sales (as applicable) and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 made at the beginning of the six-month period and held for the entire period from January 1, 2019 to June 30, 2019.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended June 30, 2019. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled Expenses Paid During Period to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

PENN CAPITAL FUNDS TRUST
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
FOR THE SIX MONTH PERIOD FROM JANUARY 1, 2019 TO JUNE 30, 2019

Cost in Dollars of a $1,000 Investment in Penn Capital Special Situations Small Cap Equity Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from January 1, 2019 to June 30, 2019, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees on sales (as applicable) and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 made at the beginning of the six-month period and held for the entire period from January 1, 2019 to June 30, 2019.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended June 30, 2019. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled Expenses Paid During Period to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

PENN CAPITAL FUNDS TRUST
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
FOR THE SIX MONTH PERIOD FROM JANUARY 1, 2019 TO JUNE 30, 2019

Cost in Dollars of a $1,000 Investment in Penn Capital Multi-Credit High Income Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from January 1, 2019 to June 30, 2019, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees on sales (as applicable) and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 made at the beginning of the six-month period and held for the entire period from January 1, 2019 to June 30, 2019.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended June 30, 2019. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled Expenses Paid During Period to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

PENN CAPITAL FUNDS TRUST
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
FOR THE SIX MONTH PERIOD FROM JANUARY 1, 2019 TO JUNE 30, 2019

Cost in Dollars of a $1,000 Investment in Penn Capital Defensive Floating Rate Income Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from January 1, 2019 to June 30, 2019, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees on sales (as applicable) and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 made at the beginning of the six-month period and held for the entire period from January 1, 2019 to June 30, 2019.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended June 30, 2019. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled Expenses Paid During Period to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

PENN CAPITAL FUNDS TRUST
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
FOR THE PERIOD FROM JANUARY 1, 2019 TO JUNE 30, 2019

Cost in Dollars of a $1,000 Investment in Penn Capital Defensive Short Duration High Income Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from January 1, 2019 to June 30, 2019, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees on sales (as applicable) and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 made at the beginning of the six-month period and held for the entire period from January 1, 2019 to June 30, 2019.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the period ended June 30, 2019. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled Expenses Paid During Period to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.