N-Q 1 conestoganq.htm N-Q Filing

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



FORM N-Q


QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

 MANAGEMENT INVESTMENT COMPANY


Investment Company Act file number 811-21120


Conestoga Funds

(Exact name of registrant as specified in charter)


Conestoga Capital Advisors

259 N. Radnor-Chester Road

Radnor Court, Suite 120

Radnor, PA 19087

 (Address of principal executive offices)

(Zip code)


Conestoga Capital Advisors

259 N. Radnor-Chester Road

Radnor Court, Suite 120

Radnor, PA 19087

 (Name and address of agent for service)


With Copy To:

Josh Deringer, Esq.

Drinker Biddle

One Logan Square, Ste 2000

Philadelphia, PA 19103


Registrant's telephone number, including area code: (800) 320-7790


Date of fiscal year end: September 30


Date of reporting period: June 30, 2012


Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5).  The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number.  Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, and 450 Fifth Street, NW, Washington, DC 20549-0609.  The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.


ITEM 1. SCHEDULE OF INVESTMENTS.


CONESTOGA SMALL CAP FUND

 

 

     
  

Schedule of Investments

 

 

June 30, 2012 (Unaudited)

Shares

  

 Market Value

% of Total Net Assets

COMMON STOCKS

  
     

Consumer Discretionary

  

Consumer Services

  

295,000

 

Zipcar, Inc. *

3,460,350

 
     

Educational Services

  

61,150

 

Capella Education Co. *

           2,125,574

 

135,275

 

Grand Canyon Education, Inc. *

           2,832,659

 

309,350

 

Healthstream, Inc. *

8,043,100

 

             Educational Services Total

13,001,333

 

Retail

    

107,500

 

Hibbett Sports, Inc. *

6,203,825

 

170,000

 

Stamps.com, Inc. *

4,193,900

 

             Retail Total

10,397,725

 
     

Consumer Discretionary Sector Total

26,859,408

10.35%

     

Energy

    

Oil:  Crude Producers

  

100,000

 

Contango Oil & Gas, Inc. *

5,920,000

 

Oil Well Equipment & Services

  

90,000

 

Carbo Ceramics, Inc.

           6,905,700

 

23,225

 

Core Laboratories NV

           2,691,778

 

             Oil Well Equipment & Services Industry Total

           9,597,478

 
     

Energy Sector Total

15,517,478

5.98%

     

Financial Services

    

Asset Management & Custodian

  

144,497

 

Westwood Holdings Group, Inc.

5,383,958

 

Financial Data & Systems

  

210,000

 

Advent Software, Inc. *

5,693,100

 

35,000

 

Factset Research Systems, Inc.

3,252,900

 

71,800

 

Morningstar, Inc.

4,152,912

 

             Financial Information Services Total

13,098,912

 
     

Financial Services Sector Total

18,482,870

7.12%

     

Healthcare

    

Healthcare Services

   

112,425

 

Quality Systems, Inc.

3,092,812

 

99,500

 

National Research Corp.

5,208,825

 

            Healthcare Services Total

8,301,637

 

Medical Equipment

  

190,000

 

Abaxis, Inc. *

           7,030,000

 

Medical and Dental Instruments and Supplies

  

222,550

 

Align Technology, Inc. *

7,446,523

 

240,500

 

Meridian Bioscience, Inc.

4,920,630

 

150,000

 

Neogen Corp. *

6,930,000

 

44,000

 

TECHNE Corp.

3,264,800

 

            Medical and Dental Instruments and Supplies Total

22,561,953

 

Pharmaceuticals & Biotech

  

490,000

 

Accelrys, Inc. *

3,964,100

 
     

Healthcare Sector Total

41,857,690

16.13%

     

Materials & Processing

  

Building Materials

   

240,000

 

Simpson Manufacturing Co., Inc.

           7,082,400

 

Chemicals & Allied Products

  

170,000

 

Balchem Corp. Class-B

           5,543,700

 
     

Materials & Processing Sector Total

         12,626,100

4.87%

     

Producer Durables

   

Aerospace

    

100,000

 

AeroVironment, Inc. *

           2,631,000

 

Commercial Services

  

140,250

 

Advisory Board Co. *

6,954,998

 

157,500

 

Costar Group, Inc. *

12,789,000

 

300,000

 

Innerworkings, Inc. *

4,059,000

 

125,000

 

Ritchie Bros. Auctioneers, Inc.

2,656,250

 

240,000

 

Rollins, Inc.

5,368,800

 

171,925

 

Tetra Tech, Inc. *

           4,483,804

 

             Commercial Services Total

         36,311,852

 

Diversified Manufacturing Operations

  

145,500

 

Raven Industries, Inc.

         10,125,345

 

Manufacturing & Production

  

84,975

 

Proto Labs, Inc. *

2,443,881

 

Scientific Instruments: Control & Filter

  

90,000

 

Faro Technologies, Inc. *

3,787,200

 

340,000

 

Sun Hydraulics Corp.

           8,258,600

 

             Scientific Instruments: Control & Filter Total

         12,045,800

 
     

Producer Durables Sector Total

63,557,878

24.50%

     

Technology

    

Computer Services Software & Systems

  

438,575

 

NIC, Inc.

5,569,902

 

361,200

 

Pro Holdings, Inc. *

6,075,384

 

185,525

 

Tyler Technologies, Inc. *

7,485,933

 

              Computer Services Software & Systems Total

19,131,219

 

Electronic Components

  

82,075

 

Hittite Microwave Corp. *

4,195,674

 

116,225

 

NVE Corp. *

6,247,093

 

              Electronic Components Total

10,442,767

 

Electronics

    

140,050

 

Acacia Research Corp. *

5,215,462

 
     

Information Technology

  

180,000

 

ACI Worldwide *

7,957,800

 

190,000

 

Blackbaud, Inc.

4,877,300

 

340,000

 

Bottomline Technologies, Inc. *

6,137,000

 

157,725

 

Comscore, Inc. *

2,596,154

 

145,725

 

Sourcefire, Inc. *

7,490,265

 

              Information Technology Total

29,058,519

 

Computer Technology

  

171,325

 

Stratasys, Inc. *

8,480,588

 
     

Technology Sector Total

72,328,555

27.88%

     

TOTAL COMMON STOCKS

  

 

 

(Cost $196,025,265)

       251,229,979

96.82%

     
     

SHORT-TERM INVESTMENTS

  

8,397,663

 

UMB Bank Money Market Fiduciary (Cost $8,397,663) 0.01% **

8,397,663

3.24%

     

TOTAL INVESTMENTS

  

 

 

(Cost $204,422,928)

259,627,642

100.06%

     
  

Liabilities in Excess of Other Assets

(156,228)

-0.06%

  

 

 

 

  

TOTAL NET ASSETS

$259,471,414

100.00%

* Non-income producing.

** Variable rate security; the coupon rate represents the rate at June 30, 2012.


NOTES TO FINANCIAL STATEMENTS

  

Conestoga Small Cap Fund

  

1. SECURITY TRANSACTIONS

  

At June 30, 2012 the net unrealized appreciation on investments, based on cost for federal income tax purposes of $204,422,928 amounted to $55,204,714 which consisted of aggregate gross unrealized appreciation of $64,482,093 and aggregate gross unrealized depreciation of $9,277,379.

     

2.  SECURITY VALUATION

  

Securities that are traded on any exchange are valued at the last quoted sale price.  Securities which are quoted by NASDAQ are valued at the NASDAQ Official Closing Price.  Lacking a last sale price, a security is valued at its last bid price except when, in the opinion of the Fund’s Adviser, the last bid price does not accurately reflect the current value of the security.  All other securities for which over-the-counter market quotations are readily available are valued at their last bid price.  When market quotations are not readily available, when the Adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board of Trustees of the Trust.   

Short-term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value.

Accounting principles generally accepted in the United States of America define fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date and also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability.  The three-tier hierarchy seeks to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  The three-tier hierarchy of inputs is summarized below:

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Valuation adjustments and block discounts are not applied to Level 1 securities.  Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The following table presents information about the Fund’s assets measured at fair value as of June 30, 2012 by major security type:


Valuation Inputs of Assets

 

Level 1

Level 2

Level 3

Total

Common Stock

 

$251,229,979

              $0

              $0

$251,229,979

Exchange Traded Funds

 

              $0

              $0

              $0

              $0

Convertible Bonds

 

              $0

              $0

              $0

              $0

Cash Equivalents

 

$8,397,663

              $0

              $0

$8,397,663

Total

 

$259,627,642

       $0

       $0

$259,627,642



CONESTOGA MID CAP FUND

 

 

     
  

Schedule of Investments

 

 

June 30, 2012 (Unaudited)

Shares

  

 Market Value

% of Total Net Assets

COMMON STOCKS

  
     

Consumer Discretionary

  

Auto Parts

    

1,550

 

Gentex Corp.

32,348

 

Consumer Goods

    

650

 

The J.M. Smucker Co.

49,088

 

Leisure

    

700

 

Polaris Industries, Inc.

50,036

 

Retail

    

900

 

Tractor Supply Co.

74,754

 
     

Consumer Discretionary Sector Total

206,226

0.08%

     

Energy

    

Oil: Crude Producers

  

650

 

SM Energy Co.

31,921

 

Oil Well Equipment & Services

  

350

 

Carbo Ceramics, Inc.

                26,855

 

600

 

Core Laboratories NV

69,540

 

             Services Commercial Total

96,395

 
     

Energy Sector Total

128,316

0.05%

     

Financial Services

    

Financial Data & Systems

  

500

 

Factset Research Systems, Inc.

46,470

 

650

 

Morningstar, Inc.

37,596

 

             Financial Information Services Total

84,066

 

Insurance

    

150

 

Markel Corp. *

66,255

 
     

Financial Services Sector Total

150,321

0.06%

     

Healthcare

    

Healthcare Services

   

1,350

 

Quality Systems, Inc.

37,138

 

Medical and Dental Instruments and Supplies

  

1,350

 

Align Technology, Inc. *

45,171

 

300

 

CR Bard, Inc.

32,232

 

500

 

Idexx Laboratories, Inc. *

48,065

 

850

 

Sirona Dental Systems, Inc. *

38,258

 

550

 

TECHNE Corp.

40,810

 

            Medical and Dental Instruments and Supplies Total

204,536

 

Pharmaceuticals & Biotech

  

1,100

 

Forest Laboratories, Inc. *

38,489

 

1,500

 

Myriad Genetics, Inc. *

35,655

 

            Pharmaceuticals & Biotech Total

74,144

 
     

Healthcare Sector Total

315,818

0.12%

     

Materials & Processing

  

Building Materials

   

800

 

Fastenal Co.

                32,248

 

Chemicals & Synthetics

  

250

 

CF Industries Holdings, Inc.

48,435

 
     

Materials & Processing Sector Total

                80,683

0.03%

     

Producer Durables

   

Commercial Services

  

550

 

Coinstar, Inc. *

                37,763

 

2,100

 

Copart, Inc. *

49,749

 

550

 

IHS, Inc. *

59,252

 

1,500

 

Ritchie Bros Auctioneers, Inc.

                31,875

 

1,750

 

Rollins, Inc.

                39,147

 

450

 

Verisk Analytics, Inc. *

22,167

 

              Commercial Services Total

239,953

 

Machinery

    

850

 

Graco, Inc.

                39,168

 

Transportation & Freight

  

450

 

C.H. Robinson Worldwide, Inc.

26,339

 

850

 

Expeditors International of Washington, Inc.

32,938

 

              Transportation & Freight Total

59,277

 

Scientific Instruments & Services

  

1,350

 

Donaldson Co., Inc.

45,050

 

1,400

 

Trimble Navigation Ltd. *

64,414

 

              Scientific Instruments & Services Total

109,464

 
     

Producer Durables Sector Total

447,862

0.17%

     

Technology

    

Electronics

    

1,450

 

Acacia Research Corp. *

53,998

 
     

Information Technology

  

1,100

 

Ansys, Inc. *

69,421

 

1,050

 

Dolby Laboratories, Inc. *

43,365

 

150

 

Equinix, Inc. *

26,348

 

850

 

Intuit, Inc.

50,448

 

1,800

 

Rovi Corp. *

35,316

 

1,050

 

Nuance Communications, Inc. *

25,011

 

1,250

 

Micro Systems, Inc. *

64,000

 

              Information Technology Total

313,909

 
     

Technology Sector Total

367,907

0.14%

     

TOTAL COMMON STOCKS

  

 

 

(Cost $196,025,265)

           1,697,133

0.65%

     
     

SHORT-TERM INVESTMENTS

  

108,596

 

UMB Bank Money Market Fiduciary (Cost $108,596) 0.01% **

108,596

0.04%

     

TOTAL INVESTMENTS

  

 

 

(Cost $1,931,274)

1,805,729

0.70%

     
  

Liabilities in Excess of Other Assets

(5,677)

0.00%

  

 

 

 

  

TOTAL NET ASSETS

$1,800,052

0.69%

* Non-income producing.

** Variable rate security; the coupon rate represents the rate at June 30, 2012.


NOTES TO FINANCIAL STATEMENTS

  

Conestoga Mid Cap Fund

  

1. SECURITY TRANSACTIONS

  

At June 30, 2012 the net unrealized depreciation on investments, based on cost for federal income tax purposes of $1,931,274 amounted to $125,545 which consisted of aggregate gross unrealized appreciation of $38,256 and aggregate gross unrealized depreciation of $163,801.

     

2.  SECURITY VALUATION

  

Securities that are traded on any exchange are valued at the last quoted sale price.  Securities which are quoted by NASDAQ are valued at the NASDAQ Official Closing Price.  Lacking a last sale price, a security is valued at its last bid price except when, in the opinion of the Fund’s Adviser, the last bid price does not accurately reflect the current value of the security.  All other securities for which over-the-counter market quotations are readily available are valued at their last bid price.  When market quotations are not readily available, when the Adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board of Trustees of the Trust.   

Short-term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value.

Accounting principles generally accepted in the United States of America define fair value  as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date and also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability.  The three-tier hierarchy seeks to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  The three-tier hierarchy of inputs is summarized below:

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Valuation adjustments and block discounts are not applied to Level 1 securities.  Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The following table presents information about the Fund’s assets measured at fair value as of June 30, 2012 by major security type:


Valuation Inputs of Assets

 

Level 1

Level 2

Level 3

Total

Common Stock

 

$1,697,133

              $0

              $0

$1,697,133

Exchange Traded Funds

 

              $0

              $0

              $0

              $0

Convertible Bonds

 

              $0

              $0

              $0

              $0

Cash Equivalents

 

$108,596

              $0

              $0

$108,596

Total

 

$1,805,729

       $0

       $0

$1,805,729



INSTITUTIONAL ADVISORS LARGECAP FUND

 

 

     
  

Schedule of Investments

 

 

June 30, 2012 (Unaudited)

Shares

  

 Market Value

% of Total Net Assets

COMMON STOCKS

  
     

Consumer Discretionary

  

Hotel Restaurants & Leisure

  

23,271

 

Darden Restaurants, Inc.

1,178,211

 

Media

    

45,538

 

McGraw-Hill Co., Inc.

2,049,210

 

Specialty Retail

    

53,362

 

The Tjx Co., Inc.

2,290,831

 

Textiles, Apparel & Luxury Goods

  

9,161

 

VF Corp.

1,222,535

 
     

 

 

Consumer Discretionary Sector Total

6,740,787

11.60%

     

Consumer Staples

    

Beverages

    

27,483

 

Pepsico, Inc.

1,941,949

 

Food Products

    

29,021

 

General Mills, Inc.

1,118,469

 

46,742

 

McCormick & Co.

2,834,902

 

         Food Products Total

3,953,371

 

Food & Staples Retailing

  

43,599

 

Walgreen Co.

1,289,658

 

Household Products

  

13,106

 

Colgate Palmolive Co.

1,364,335

 
     

 

 

Consumer Staples Sector Total

8,549,313

14.72%

     

Energy

    

Energy Equipment & Services

  

11,635

 

Diamond Offshore Drilling, Inc.

687,978

 

Oil, Gas & Consumable Fuels

  

21,465

 

Chevron Corp.

2,264,558

 

22,803

 

Exxon Mobil Corp.

1,951,253

 

        Oil, Gas & Consumable Fuels Total

4,215,811

 
     

 

 

Energy Sector Total

           4,903,789

8.44%

     

Financials

    

Capital Markets

    

53,362

 

Federated Investors, Inc.

1,165,960

 

Commercial Banks

   

40,857

 

US Bancorp.

1,313,961

 

Consumer Finance

   

51,089

 

Discover Financial Services

1,766,658

 

        Consumer Finance Total

  

Insurance

    

45,405

 

Progressive Corp.

945,786

 
     

 

 

Financials Sector Total

5,192,365

8.94%

     

Health Care

    

Biotechnology

    

31,563

 

Amgen, Inc.

           2,301,258

 

Health Care Equipment & Supplies

  

19,597

 

Baxter International, Inc.

           1,041,581

 

Health Care Providers & Services

  

10,565

 

Laboratory Corp of America Holdings *

978,425

 

17,854

 

McKesson Corp.

1,673,813

 

       Health Care Providers & Services Total

2,652,238

 

Pharmaceuticals

    

33,167

 

Johnson & Johnson

2,240,763

 

67,472

 

Pfizer, Inc.

1,551,856

 

       Pharmaceuticals Total

3,792,619

 
     

 

 

Health Care Sector Total

9,787,696

16.85%

     

Industrials

    

Aerospace & Defense

  

24,742

 

United Technologies Corp.

1,868,763

 

Air Freight & Logistics

  

20,128

 

C.H. Robinson Worldwide, Inc.

1,178,092

 

Industrial Conglomerates

  

23,204

 

Danaher Corp.

           1,208,464

 

Machinery

    

12,237

 

Parker-Hannifan Corp.

              940,781

 
     

 

 

Industrials Sector Total

           5,196,100

8.95%

     

Information Technology

  

Communications Equipment

  

27,550

 

Qualcomm, Inc

           1,533,984

 

Computers & Peripherals

  

4,547

 

Apple, Inc. *

2,655,448

 

IT Services

    

10,967

 

International Business Machines, Inc.

2,144,925

 

Semiconductors

    

55,903

 

Intel Corp.

1,489,815

 

Software

    

75,630

 

Microsoft Corp.

2,313,521

 

65,532

 

Oracle Corp.

1,946,300

 

       Software Total

 

           4,259,821

 
     

 

 

Information Technology Sector Total

12,083,993

20.80%

     

Materials

    

Containers & Packaging

  

35,107

 

Ball Corp.

           1,441,142

 
     

 

 

Materials Sector Total

1,441,142

2.48%

     

Telecommunications

  

Diversified Telecommunication

  

50,821

 

AT&T, Inc.

           1,812,276

 
     

 

 

Telecommunications Sector Total

1,812,276

3.12%

     

Utilities

    

Multi-Utilities

    

39,788

 

Wisconsin Energy Corp.

           1,574,411

 
     

 

 

Utilities Sector Total

1,574,411

2.71%

     

TOTAL COMMON STOCKS

  

 

 

(Cost $47,087,213)

         57,281,872

98.61%

     
     

SHORT-TERM INVESTMENTS

  

854,070

 

UMB Bank Money Market Fiduciary 0.01% (Cost $854,070) **

854,070

1.47%

     
     

TOTAL INVESTMENTS

  

 

 

(Cost $47,941,283)

58,135,942

100.08%

     
  

Liabilities in Excess of Other Assets

(47,343)

-0.08%

  

 

 

 
  

TOTAL NET ASSETS

58,088,599

100.00%

* Non-income producing.

** Variable rate security; the coupon rate represents the rate at June 30, 2012.


NOTES TO FINANCIAL STATEMENTS

  

Institutional Advisors LargeCap Fund

  

1. SECURITY TRANSACTIONS

  

At June 30, 2012 the net unrealized appreciation on investments was $10,194,659, which consisted of aggregate gross unrealized appreciation of $11,467,843 and aggregate gross unrealized depreciation of $1,273,184.

     

2. SECURITY VALUATION

  

Securities that are traded on any exchange are valued at the last quoted sale price.  Securities which are quoted by NASDAQ are valued at the NASDAQ Official Closing Price. Lacking a last sale price, a security is valued at its last bid price except when, in the opinion of the Fund’s Adviser, the last bid price does not accurately reflect the current value of the security.  All other securities for which over-the-counter market quotations are readily available are valued at their last bid price.  When market quotations are not readily available, when the Adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board.   

Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value.

Accounting principles generally accepted in the United States of America define fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date and also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability.  The three-tier hierarchy seeks to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  The three-tier hierarchy of inputs is summarized below:

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Valuation adjustments and block discounts are not applied to Level 1 securities.  Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

 

The following table presents information about the Fund’s assets measured at fair value as of June 30, 2012 by major security type:


Valuation Inputs of Assets

 

Level 1

Level 2

Level 3

Total

Common Stock

 

$57,281,872

              $0

              $0

$57,281,872

Exchange Traded Funds

 

              $0

              $0

              $0

              $0

Convertible Bonds

 

              $0

              $0

              $0

              $0

Cash Equivalents

 

$854,070

              $0

              $0

$854,070

Total

 

$58,135,942

       $0

       $0

$58,135,942



ITEM 2. CONTROLS AND PROCEDURES.


    (a)

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective.

    (b)

CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q.


ITEM 3. EXHIBITS.


Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Conestoga Funds


By /s/ William C. Martindale Jr.

* William C. Martindale Jr.

   Chief Executive Officer


Date August 20, 2012


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By /s/ William C. Martindale Jr.

* William C. Martindale Jr.

   Chief Executive Officer


Date August 20, 2012


By /s/Robert M. Mitchell

* Robert M. Mitchell

  Treasurer and Chief Financial Officer


Date August 20, 2012


* Print the name and title of each signing officer under his or her signature.