Buffalo Large Cap Fund, Inc. 485APOS

PART B

BUFFALO BALANCED FUND, INC.

BUFFALO HIGH YIELD FUND, INC.

BUFFALO LARGE CAP FUND, INC.

BUFFALO MICRO CAP FUND

(a series of Buffalo Funds)

BUFFALO MID CAP FUND

(a series of Buffalo Funds)

BUFFALO SCIENCE & TECHNOLOGY FUND

(a series of Buffalo Funds)

BUFFALO SMALL CAP FUND, INC.

BUFFALO USA GLOBAL FUND, INC.

STATEMENT OF ADDITIONAL INFORMATION

July __, 2005

This Statement of Additional Information is not a Prospectus but should be read in conjunction with the Funds’ current Prospectus, dated July __, 2005. Certain information from the Funds’ Annual Report to Shareholders is incorporated by reference into this Statement of Additional Information. To obtain the Prospectus or the most recent Annual or Semi-Annual Report to shareholders, free of charge, please call the Funds toll-free at 1-800-49-BUFFALO (1-800-492-8332).

TABLE OF CONTENTS

		Page
INTRODUCTION		1
INFORMATION ABOUT THE FUNDS’ INVESTMENTS		1
	Description of the Funds.	1
	Principal Investment Strategies, Policies and Risks.	3
	Non-Principal Investment Strategies, Policies and Risks.	8
	Fundamental Investment Restrictions.	10
	Non-Fundamental Investment Restrictions.	14
	Portfolio Turnover.	16
FUND SECURITIES TRANSACTIONS		16
PURCHASING AND SELLING SHARES		18
	Purchases.	18
	Sales (Redemptions)	18
	Market Timers.	19
	Anti-Money Laundering Program	19
	Net Asset Value.	19
	Additional Purchase and Redemption Policies.	21
MANAGEMENT OF THE FUNDS		21
	Directors and Officers.	21
	Audit Committee.	25
	Compensation.	25
	Portfolio Holdings Disclosure Policies and Procedures	26
	Investment Advisor and Manager.	26
	Principal Underwriter.	27
	Code of Ethics.	27
	Custodian.	27
	Independent Registered Public Accounting Firm.	27
	Administrator.	28
	Transfer Agent	28
PORTFOLIO MANAGERS OF THE FUNDS		28
CONTROL PERSONS AND PRINCIPAL HOLDERS OF THE FUNDS		35
MANAGEMENT OWNERSHIP OF THE FUNDS		37
DISTRIBUTIONS AND TAXES		38
FINANCIAL STATEMENTS		41
GENERAL INFORMATION AND HISTORY		41
PROXY VOTING POLICIES AND PROCEDURES		42
APPENDIX-RATINGS INFORMATION.		43

INTRODUCTION

This Statement of Additional Information (“SAI”) supplements the Buffalo Funds’ Prospectus, dated July __, 2005. This SAI provides additional information concerning the organization, operation and management of the Buffalo Balanced Fund, Inc., Buffalo High Yield Fund, Inc., Buffalo Large Cap Fund, Inc., Buffalo Micro Cap Fund, Buffalo Mid Cap Fund, Buffalo Science & Technology Fund, Buffalo Small Cap Fund, Inc., and Buffalo USA Global Fund, Inc. (collectively, the “Buffalo Funds” or the “Fund(s)”).

All of the Buffalo Funds are classified as open-end, management investment companies (or series thereof) under the Investment Company Act of 1940, as amended (the “1940 Act”), and all of the Funds qualify as diversified under the 1940 Act and the Federal tax laws. This means that the Funds allow shareholders to buy and sell shares at any time, as described in the Funds’ Prospectus and in this SAI, and that the assets of the Funds are invested in a diversified portfolio of securities--qualifying the Funds for pass-through tax treatment.

Kornitzer Capital Management, Inc. serves as each Fund’s manager and investment advisor (“KCM” or the “Advisor”). KCM is responsible for the overall management of each of the Funds and makes the Funds’ day-to-day investment decisions.

INFORMATION ABOUT THE FUNDS’ INVESTMENTS

The objectives, strategies and policies discussed in this SAI and in the Funds’ Prospectus generally apply when a Fund makes an investment. If a percentage or other restriction is met at the time of initial investment, except with respect to borrowings and holdings in illiquid securities, a Fund is usually not required to sell a security or other investment because circumstances change and the security or other investment no longer meets one or more of a Fund’s restrictions. If at any time a Fund’s borrowings exceed its limitations due to a decline in net assets, such borrowings will be reduced promptly to the extent necessary to comply with the limitation. Likewise, in the event that a Fund’s holdings in illiquid securities exceeds its limitations due to market factors, a Fund will make such adjustments necessary to reduce its holdings in such securities to comply with its limitations.

With regard to the Buffalo Balanced, Buffalo High Yield, Buffalo Large Cap, Buffalo Small Cap and Buffalo USA Global Funds, unless stated otherwise, the objectives, strategies and policies described in this SAI and the Prospectus may not be changed without approval of a majority of the applicable Fund’s outstanding shares. With regard to the Buffalo Micro Cap, Buffalo Mid Cap and the Buffalo Science & Technology Funds, a change in investment objectives, strategies or policies does not require shareholder approval.

Below you will find descriptions of each Fund’s principal investment objective and strategies. Following the Fund descriptions, you will find a more detailed description of the Funds’ investments and their associated risks, with the Funds’ principal investment strategies and policies listed first, followed by additional investment strategies and policies used by the Funds to achieve their investment objective.

DESCRIPTION OF THE FUNDS

Buffalo Balanced Fund--seeks, as a primary objective, long-term capital growth and, as a secondary objective, high current income. The Fund intends to achieve its primary objective by investing primarily in domestic common stocks and by investing secondarily in convertible debt securities and convertible preferred stocks. The Fund intends to achieve its secondary objective, high current income, by investing in corporate bonds, government bonds, mortgage-backed securities, convertible debt securities, preferred stocks and convertible preferred stocks. The Fund will often invest in higher yielding, high-risk debt securities. The Advisor generally expects that these debt securities will be rated below investment grade by the major rating agencies. The Fund typically invests at least 25% of its net assets in equity securities and at least 25% of its net assets in debt securities, although the Advisor may deviate from this combination when it believes that doing so is in the best interest of the Fund’s shareholders.

B-1

The Advisor expects that the majority of common stocks purchased for the Fund will be of large-capitalization (“large-cap”) companies. This Fund considers large-cap companies to be those with market capitalization in excess of $10 billion at the time of initial purchase.

The Fund retains the freedom to invest up to 75% of its net assets in corporate debt securities, convertible debt securities, preferred stocks and convertible preferred stocks, including higher yielding, high-risk debt securities. High-risk debt securities are those rated below BBB by Standard & Poor’s Ratings Group (“S&P”) or Baa by Moody’s Investors Service, Inc. (“Moody’s”) and are commonly called “junk bonds”. Yields on such bonds may fluctuate significantly, and, therefore, achievement of the Fund’s investment objectives may be more dependent on the Advisor’s credit analysis ability than it would be for investments in higher rated bonds.

However, the Fund will not purchase a debt security that is rated less than Caa/CCC by Moody’s or S&P, respectively, and will only purchase an unrated debt security if the Advisor believes that the security is of at least B quality. Rated debt securities, which are downgraded to below B quality and unrated debt securities, which the Advisor believes have fallen below B quality, will be sold at the Advisor’s discretion, subject to a limitation that the Fund may not hold more than 20% of its net assets in debt securities that are rated less than B or that are unrated.

Buffalo High Yield Fund--primarily seeks high current income and secondarily seeks long-term capital growth. The Fund invests, under normal conditions, at least 80% of its net assets in a diversified portfolio of higher yielding, high-risk debt securities. The Fund also generally intends to invest a small percentage of its net assets in equity securities. The Fund will pursue its secondary investment objective, capital growth, through appreciation of the debt and equity securities that it holds. The proportion of the Fund’s net assets invested in debt and equity securities will change over time in accordance with the Advisor’s analysis of economic conditions and the underlying value of securities.

The Fund may invest up to 100% of its net assets in debt securities, including without limitation, corporate and convertible debt securities. The Fund may also purchase government debt securities but will not invest in debt securities issued by foreign governments. The debt securities in which the Fund invests will typically be rated below investment grade by the major rating agencies, which places greater importance on the Advisor’s credit analysis ability than investing in higher rated debt securities. The Fund may also invest in preferred stocks and convertible preferred stocks.

The Fund may purchase and invest up to 20% of its net assets in debt securities that are rated less than B, by Moody’s or S&P, or in unrated, similar-quality debt securities. Rated debt securities, which are downgraded to below B quality after purchase, and unrated debt securities, which the Advisor believes have fallen below B quality after purchase, are not subject to this limitation, and such securities will be sold at the Advisor’s discretion. The lowest rated debt security that the Fund will hold is D quality (defaulted securities). Although the Fund will not purchase D quality debt securities, the Fund may continue to hold these securities and will sell them at the Advisor’s discretion.

The Fund maintains a flexible investment policy with regard to the maturities of the debt securities it holds. But it is presently expected that the average maturity of debt securities that the Fund purchases will not exceed 15 years and that the average maturity of all securities that the Fund holds at any given time will be ten years or less.

If the Advisor believes that a full or partial temporary defensive position is necessary, due to present or anticipated market or economic conditions, the Advisor may take any one or more of the following steps to protect the Fund’s assets: (1) shorten the average maturity of the Fund’s debt securities, (2) hold more or all cash or cash equivalents and (3) emphasize investment in higher grade debt securities. If the Advisor implements a defensive position the Fund's yield may decline, and the Fund may not achieve its investment objectives.

Buffalo Large Cap Fund--seeks long-term capital growth by investing, under normal conditions, at least 80% of its net assets (plus any borrowings made for investment purposes) in domestic common stocks and other equity securities of large-cap companies. As a non-fundamental policy, the Fund considers a company to be a large-cap company if, at time of purchase by the Fund, it has a market capitalization of $10 billion or greater. The Fund’s non-fundamental policy regarding the definition of large-cap companies can be changed without shareholder approval. The Advisor seeks dividend income as a secondary consideration in its stock selection process. The Fund will normally invest in a broad array of domestic common stocks that are diversified in terms of companies and industries. The Fund expects that the majority, if not all, of the companies in which it invests will be listed on the New York Stock Exchange.

B-2

Buffalo Micro Cap Fund--seeks long-term capital growth by investing, under normal conditions, at least 80% of its net assets (plus any borrowings made for investment purposes) in domestic common stocks and other equity securities (including preferred stocks and convertible preferred stock) of micro-capitalization (“micro-cap”) companies. The Fund considers a company to be a micro-cap company if, at time of purchase by the Fund, it has a market capitalization equal to or less than the greater of (1) $600 million, or (2) the median capitalization of companies in the Russell 2000 Index. The capitalization of companies within the Russell 2000 Index changes due to market conditions and changes in the composition of the Russell 2000 Index. The Fund will normally invest in a broad array of securities and other investments that are diversified in terms of companies and industries.

Buffalo Mid Cap Fund--seeks long-term capital growth by investing, under normal conditions, at least 80% of its net assets (plus any borrowings made for investment purposes) in domestic common stocks and other equity securities (including convertible preferred stocks and warrants) of medium-capitalization (“mid-cap”) companies. The Fund considers a company to be a mid-cap company if, at time of purchase by the Fund, it has a market capitalization between $1.5 billion and $10 billion. The Fund will normally invest in a broad array of securities that are diversified in terms of companies and industries.

Buffalo Science & Technology Fund--seeks long-term capital growth by investing, under normal conditions, at least 80% of its net assets (plus any borrowings made for investment purposes) in domestic common stocks and other equity securities (including convertible preferred stocks and warrants) of companies expected to benefit from the development, advancement and use of science and technology. The Fund’s principal investment strategy is to select stocks that the Advisor believes have prospects for above average earnings based on intensive fundamental research. Holdings can range from small companies developing new technologies to blue chip firms with established track records of developing and marketing technology. Investments may also include companies that are likely to benefit from technological advances even if those companies are not directly involved in the specific research and development of the advance. Some of the industries in which the Fund may look to invest include: electronics, including hardware, software and components; communications; E-commerce; information services; media; life sciences and healthcare; environmental services; chemicals and synthetic materials; and defense and aerospace.

Buffalo Small Cap Fund--seeks long-term capital growth by investing, under normal conditions, at least 80% of its net assets (plus any borrowings made for investment purposes) in domestic common stocks and other equity securities (including convertible preferred stocks and warrants) of smaller, or “small-cap,” companies. The Fund considers a company to be a small-cap company if, at the time of initial purchase, it has a market capitalization of up to $1 billion or in the lowest 20% total market capitalization of companies that have equity securities listed on a U.S. national securities exchange or trading on the NASDAQ system. Based on current market conditions, the current target is issuers with individual market capitalization of $2 billion or less at the time of purchase. The Fund will normally invest in a broad array of securities that are diversified in terms of companies and industries.

Buffalo USA Global Fund--seeks long-term capital growth by investing, under normal conditions, at least 80% of its net assets (plus any borrowings made for investment purposes) in the common stocks of companies based in the United States that have substantial international operations. The Fund considers an American company to have substantial international operations if the company receives more than 40% of its revenue or pre-tax income from sales or operations outside of the U.S. The Fund will diversify its investment in these American-based companies so that the Fund is exposed to the markets of at least three different foreign countries. The Fund’s Advisor measures the 40% minimums in income or revenue from international operations by looking at each respective company’s most recent completed quarter of business or its most recently completed fiscal year as of the time that the Fund makes its initial purchase of the company’s securities. The Advisor looks to invest in the common stocks of companies that appear to have above average potential for appreciation; income is a secondary consideration.

B-3

PRINCIPAL INVESTMENT STRATEGIES, POLICIES AND RISKS.

Common Stock. All of the Buffalo Funds may invest in the domestic common stock of companies. The purchaser of common stock receives an ownership interest in a company and usually certain voting rights with regard to that company. The owner of common stock may participate in a company’s success through the receipt of dividends, which are distributions of earnings by the company to its owners. Owners of common stock may also participate in a company’s success or lack of success through increases or decreases in the value of the company’s shares as they are traded in the public securities markets. But common stocks, and stock markets generally, can be volatile and can decline significantly in response to adverse issuer, political, regulatory, market or economic developments.

Other Equity Securities. To the extent that any of the Buffalo Funds purchase equity securities, other than common stocks, including preferred stocks, convertible preferred stocks and warrants, they will be exposed to the following benefits and risks.

A convertible preferred stock is a preferred stock that may be converted within a specified period of time into a certain amount of common stock of the same or a different issuer. Preferred stocks are equity securities that often pay dividends at a specific rate and have a preference over common stocks in dividend payments and liquidation of assets. Convertible preferred stock provides a fixed-income stream and the opportunity, through its conversion feature, to participate in the capital appreciation resulting from a market price advance in its underlying common stock. Convertible preferred stock tends to increase in market value when interest rates decline and decrease in value when interest rates rise. Like a common stock, the value of a convertible preferred stock also tends to increase as the market value of the underlying stock rises, and it tends to decrease as the market value of the underlying stock declines. Because both interest rate and market movements can influence its value, Convertible preferred stock is not as sensitive to interest rates as a similar debt security and not as sensitive to changes in share price as its underlying stock.

Convertible preferred stock is usually issued either by an operating company or by an investment bank. When issued by an operating company, convertible preferred stock tends to be senior to common stock, but subordinate to other types of debt securities issued by that company. When convertible preferred stock issued by an operating company is “converted,” the operating company often issues new stock to the holder of the convertible stock. If, however, the parity price, which is the price at which the common stock underlying the convertible stock may be obtained, of the convertible stock is less than the call price, which is the price of the bond including any premium related to the conversion feature, the operating company may pay out cash instead of common stock. When convertible preferred stock is issued by an investment bank, the security is an obligation of and is convertible through the issuing investment bank.

In addition, the issuer of the convertible preferred stock may be important in determining the security’s true value. This is because the holder of the convertible preferred stock will have recourse only to the issuer. Convertible preferred stock may also be subject to redemption by the issuer, but only after a specified date and under circumstances established at the time the security is issued. Convertible preferred stock is treated like a preferred stock for a Fund’s financial reporting, credit rating and investment limitation purposes.

A warrant allows the holder to purchase a security at a fixed price during a preset time period. The value of a warrant will increase, if the market value of a particular security increases after the warrant is purchased. If the market value of the security decreases after the warrant is purchased or if the term of the warrant expires before it is exercised, the holder of the warrant will incur a loss. Warrants do not provide the holder the right to receive dividends or the right to vote.

Large-Cap Companies. The Buffalo Large Cap Fund and, to the extent that they purchase such securities, the other Buffalo Funds, will be exposed to the benefits and risks of investing in the securities of larger companies. Large-cap companies may be more stable than newer, smaller companies, and securities of larger companies tend to be regularly traded. Large-cap companies, however, may be unable to respond quickly to new competitive challenges. Large-cap companies are also sometimes unable to attain the high growth rates of successful, smaller companies, especially during extended periods of economic expansion.

B-4

Mid-Cap Companies. The Buffalo Mid Cap Fund and, to the extent that they purchase such securities, the other Buffalo Funds, will be exposed to the benefits and risks of investing in the securities of mid-cap companies. Mid-cap companies may have more potential for growth than larger companies, but mid-cap companies may not have the management experience, financial resources, product diversification and competitive strengths of larger, more established companies. Mid-cap company securities also may be bought and sold less often and in smaller amounts than larger company securities. If a Fund wants to sell a large quantity of a mid-cap company’s securities, it may have to sell at a lower price or sell in smaller than desired quantities over a period of time.

Small-Cap Companies. The Buffalo Small Cap Fund, Micro-Cap Fund and, to the extent that they purchase such securities, the other Buffalo Funds, will be exposed to the benefits and risks of investing in the securities of small-cap companies. Smaller, less seasoned companies may have more potential for greater and rapid growth, but investing in small-cap companies may also involve greater risk than investing in larger companies. Small-cap companies may not have the management experience, financial resources, product diversification and competitive strengths of larger, more established companies. Small-cap company stocks also tend to be bought and sold less often and in smaller amounts than larger company stocks. If a Fund wants to sell a large quantity of a small-cap company’s securities, it may have to sell at a lower price or sell in smaller than desired quantities over a period of time.

Micro-Cap Companies. The Buffalo Micro Cap Fund, Buffalo Small Cap Fund and Buffalo Science & Technology Fund will be exposed to the benefits and risks of investing in the securities of micro-cap companies. Small, less seasoned companies have more potential for rapid growth. They also often involve greater risk than larger companies. Micro-cap companies will likely not have the management experience, financial resources, product diversification and competitive strengths of larger companies, and will be more vulnerable to adverse business or economic developments in the market as a whole. In addition, many of these companies may face difficulties in obtaining the capital necessary to continue in operation and may go into bankruptcy, which could result in a complete loss of the investment in the company. The securities of micro-cap companies, therefore, tend to be more volatile than the securities of larger, more established companies. Micro-cap company stocks also will be bought and sold less often and in smaller amounts than other stocks, making them less liquid than other securities. If the Fund wants to sell a large quantity of a micro-cap company’s stock, it may have to sell at a lower price than the Advisor might prefer, or it may have to sell in smaller than desired quantities over a period of time.

Debt Securities. The Buffalo Balanced Fund and the Buffalo High Yield Fund and, to the extent that they purchase such securities, the other Buffalo Funds, will be exposed to the benefits and risks of investing in debt securities. A debt security represents a loan of money by the purchaser of the security to the issuer. A debt security typically has a fixed payment schedule that obligates the issuer to pay interest to the lender and to return the lender’s money over a certain period of time. Companies typically make payments on their debt securities before they declare and pay dividends to holders of their equity securities. Bonds, notes, debentures and commercial paper are types of debt securities. Each of these differs in the length of the issuer’s payment schedule, with commercial paper having the shortest payment schedule. Independent rating organizations rate debt securities based upon their assessment of the financial soundness of the issuer, and a lower rating usually indicates higher risk.

The yields and principle values of debt securities fluctuate. Generally, values of debt securities change inversely with interest rates. That is, as interest rates go up, the values of debt securities tend to go down and vice versa. These fluctuations tend to increase as a bond’s maturity increases such that a longer-term bond will increase or decrease more for a given change in interest rates than a shorter-term bond.

A convertible debt security is a debt obligation that may be converted in a specified period of time into a certain amount of common stock of the same or a different issuer. A convertible debt security provides a fixed-income stream and the opportunity, through its conversion feature, to participate in the capital appreciation resulting from a market price advance in its underlying common stock. As with a straight debt security, a convertible debt security tends to increase in market value when interest rates decline and decrease in value when interest rates rise. Like a common stock, however, the value of a convertible debt security also tends to increase as the market value of the underlying stock rises, and it tends to decrease as the market value of the underlying stock declines. Because both interest rate and market movements can influence its value, a convertible security is not as sensitive to interest rates as a similar debt security and not as sensitive to changes in share price as its underlying stock.

B-5

A convertible debt security is usually issued either by an operating company or by an investment bank. When issued by an operating company, convertible debt tends to be senior to common stock, but subordinate to other types of debt securities issued by that company. When a convertible debt security issued by an operating company is “converted,” the operating company often issues new stock to the holder of the convertible security. If, however, the parity price, which is the price at which the common stock underlying the convertible debt security may be obtained, of the convertible debt security is less than the call price, which is the price of the bond including any premium related to the conversion feature, the operating company may pay out cash instead of common stock. When a convertible debt security is issued by an investment bank, the security is an obligation of and is convertible through the issuing investment bank.

In addition, the issuer of a convertible security may be important in determining the security’s true value. This is because the holder of a convertible security will have recourse only to the issuer. A convertible debt security may be subject to redemption by the issuer, but only after a specified date and under circumstances established at the time the security is issued. The Advisor uses the same criteria to rate a convertible debt security as it uses to rate a more conventional debt security.

The Buffalo Balanced Fund and the Buffalo High Yield Fund purchase debt securities as previously described in this SAI. Consistent with their investment objectives, strategies and policies, the remaining Buffalo Funds may purchase debt securities that, at the time of initial purchase, are rated A or higher by Moody’s or S&P or that are unrated, if the Advisor determines that the debt security is of comparable quality. Rated debt securities, which are downgraded below A after being purchased, and unrated debt securities, which the Advisor believes have fallen below that level after being purchased, will be sold at the Advisor’s discretion. Each of the Buffalo Funds may also purchase debt securities, as stated in this SAI’s Cash Management description, even though such an investment is not consistent with a Fund’s objectives or its other strategies or policies.

High Yield Debt Securities. The Buffalo Balanced and Buffalo High Yield Funds invest in higher yielding, high-risk debt securities, often referred to as junk bonds. These lower-grade debt instruments generally offer higher yields than other debt securities. They can also carry a greater risk of default, which is the risk that the issuer will not make interest or principal payments when due. In the event of an unanticipated default, a Fund would experience a reduction in its income, and could expect a decline in the market value of the securities affected by the default. During an economic downturn or substantial period of rising interest rates, highly leveraged issuers may experience financial stress that adversely affects their ability to service their principal and interest payment obligations, to meet projected business goals and to obtain additional financing, and any of these factors could lead to a default.

The market prices of lower-grade debt securities are generally less sensitive to interest rate changes than higher rated investments but are more sensitive to adverse economic or political conditions and negative, individual issuer developments. Lower-grade debt securities may also have less liquid markets than higher rated debt securities, and their liquidity may be more heavily impacted by adverse economic, political or issuer conditions. Negative publicity or investor perceptions, as well as new or proposed laws, may also have a significant impact on the market for these debt securities.

Credit quality of lower-grade securities can change suddenly and unexpectedly, and, even recently-issued, credit ratings may not fully reflect the actual risks posed by a particular higher yielding, high-risk debt security. For these reasons, the Advisor uses its own independent and ongoing review of credit quality in addition to the national rating organizations in selecting these debt securities for the Funds.

As mutual funds investing in debt securities, both of the Funds are subject primarily to interest rate, income and credit risk. Interest rate risk is the potential for a decline in bond prices due to rising interest rates. In general, bond prices vary inversely with interest rates. When interest rates rise, bond prices generally fall. Conversely, when interest rates fall, bond prices generally rise. The change in price depends on several factors, including the bond’s maturity date. In general, bonds with longer maturities are more sensitive to interest rates than bonds with shorter maturities. The Funds are also subject to income risk, which is the potential for a decline in the respective Fund’s income due to falling market interest rates. In addition to interest rate and income risks, each Fund is subject to credit risk, which is the risk of non-payment of interest or principal when due. The credit risk of a Fund depends on the quality of its investments.

B-6

Asset-Backed Securities. The Buffalo Balanced Fund and the Buffalo High Yield Fund may invest in asset-backed securities. Asset-backed securities are collateralized by short maturity loans such as automobile receivables, credit card receivables, and other types of receivables or assets. Credit support for asset-backed securities may be based on the underlying assets and/or provided through credit enhancements by a third party. Credit enhancement techniques include letters of credit, insurance bonds, limited guarantees, which are generally provided by the issuer, senior-subordinated structures and over-collateralization. As with other debt securities, the value of asset-backed securities will fluctuate in response to changing interest rates and developments with the issuer and the general economy. In addition to risks presented by changes in interest rates, prepayments, early calls and defaults can reduce returns on asset-backed securities.

Mortgage-Backed Securities. The Buffalo Balanced Fund and the Buffalo High Yield Fund may invest in mortgage-backed securities. Mortgage-backed securities represent an ownership interest in a pool of mortgage loans originated by mortgage bankers, commercial banks, savings and loan associations, savings banks and credit unions to finance purchases of homes, commercial buildings or other real estate. The individual mortgage loans are packaged or “pooled” together for sale to investors. As the underlying mortgage loans are paid off, investors receive principal and interest payments.

The market value of mortgage securities will generally vary inversely with changes in market interest rates, declining when interest rates rise and rising when interest rates decline. While having less risk of a decline in value during periods of rapidly rising rates, mortgage securities may also have less potential for capital appreciation than other debt securities of comparable maturities as interest rates decline, due to the increased likelihood of mortgage prepayments. An unexpected rise in interest rates could extend the average life of a mortgage security because of a lower than expected level of prepayments, potentially reducing the security’s value and increasing its volatility. In addition, to the extent mortgage securities are purchased at a premium, mortgage foreclosures and unscheduled principal prepayments may result in some loss of the holder’s principal investment to the extent of the premium paid. On the other hand, if mortgage securities are purchased at a discount, both a scheduled payment of principal and an unscheduled prepayment of principal will increase current and total returns and will accelerate the recognition of income that, when distributed to shareholders, will be taxable as ordinary income.

International Investing. International investing allows a mutual fund the opportunity to avoid being exclusively tied to the performance of the United States economy and can expose a fund to growth in emerging markets. But international investing involves risks such as currency fluctuation and instability. None of the Buffalo Funds intend to invest directly in foreign securities or foreign currencies.

The Buffalo USA Global Fund gains international exposure, while attempting to limit its risks, by investing primarily in U.S. companies with substantial international operations. Although this investment style is not direct foreign investment, the U.S. companies in which this Fund normally invests will directly experience the risk of foreign operations in their day-to-day business.

Each of the other Buffalo Funds may gain international exposure by purchasing American Depositary Receipts (“ADRs”), which are receipts typically issued by a U.S. bank or trust company that are denominated in U.S. Dollars and represent ownership in underlying foreign securities. ADRs are issued by domestic banks, are publicly traded in the United States, represent ownership in an underlying foreign security and are subject to similar risks as are other types of foreign investments. Each Fund is authorized to invest up to 25% of its net assets in ADRs, but each Fund presently expects to limit its investments in ADRs to less than 10% of net assets.

Most ADRs are traded on a U.S. stock exchange and are either sponsored or unsponsored. Issuers of unsponsored ADRs are not contractually obligated to disclose material information in the U.S. and, therefore, there may not be a correlation between such information and the market value of an unsponsored ADR. Investing in foreign companies, even through ADRs, may involve more risks than investing in U.S. companies. These risks can increase the potential for losses and may include: currency risks, like adverse fluctuations in currency exchange rates; country risks, including political, social and economic instability, currency devaluation and policies that have the effect of limiting or restricting foreign investment or the movement of foreign assets; unusual trading practices; less government supervision; less publicly available information; limited trading markets; and greater volatility, among others. While ADRs do not involve the same direct currency and liquidity risks as securities denominated in a foreign currency, their value will generally be affected by currency fluctuations that alter the value of the security underlying the ADR with respect to the U.S. Dollar.

B-7

Covered Call Options. Each of the Buffalo Funds are authorized to write, which means sell, covered call options on the securities in which a Fund invests and to enter into closing purchase transactions with respect to the options. A covered call option is an option where a Fund, in return for a premium, gives another party a right to buy specified securities owned by the Fund at a specified future date and price set at the time of the contract. Covered call options are intended to serve as a partial hedge against any declining price of the underlying securities. A closing purchase transaction cancels out a Fund’s position as the writer of an option by means of an offsetting purchase of an identical option prior to the expiration of the option that the Fund has written.

Up to 25% of a Fund’s net assets may be subject to covered call options. By writing covered call options, a Fund gives up the opportunity, while the option is in effect, to profit from any price increase in the underlying security above the option exercise price. In addition, a Fund’s ability to sell the underlying security will be limited while the option is in effect unless the Fund effects a closing purchase transaction.

Upon the termination of a Fund’s obligation under a covered call option, other than through exercise of the option, the Fund will realize a short-term capital gain or loss. If a Fund exercises an option and realizes a gain, the gain will be short-term or long-term depending on the period that the stock was held. Writing of covered call options creates a straddle that is potentially subject to the straddle rules, which result in a deferral of some losses for tax purposes.

NON-PRINCIPAL INVESTMENT STRATEGIES, POLICIES AND RISKS.

Cash Management. Each of the Buffalo Funds may invest a portion of its assets in cash or high-quality, short-term debt obligations readily changeable into cash. Such high-quality, short-term obligations include money market securities, money market mutual funds, commercial paper, bank certificates of deposit and repurchase agreements that are collateralized by government securities. These investments may be used for cash management purposes and to maintain liquidity in order to satisfy redemption requests or pay unanticipated expenses, or they may be used while the Advisor looks for suitable investment opportunities. There may also be times when a Fund attempts to respond to adverse market, economic, political or other conditions by investing up to 100% of its assets in these types of investments for temporary, defensive purposes. During such times, the Fund, taking the defensive position, will not be able to pursue its primary investment objective and, instead, will focus on preserving its assets.

In pursuing cash management strategies, the Buffalo Funds apply the following criteria to their investments:

(1)

Certificates of deposit, bankers’ acceptances and other short-term obligations must be issued domestically by United States commercial banks having assets of at least $1 billion and which are members of the Federal Deposit Insurance Corporation or holding companies of such banks;

(2)	Commercial paper will be limited to companies rated P-1 or higher by Moody’s or A-1 or higher by S&P, or if not rated by either Moody’s or S&P, a company’s commercial paper may be purchased, if the company has an outstanding bond issue rated Aa or higher by Moody’s or AA or higher by S&P;

(3)	The Funds will purchase only short-term debt securities that are non-convertible, that have one year or less remaining to maturity at the date of purchase, and that are rated Aa or higher by Moody’s or AA or higher by S&P; and,

(4)

The Funds will purchase only negotiable certificates of deposit and other short-term debt obligations of savings and loan associations having assets of at least $1 billion, which are members of the Federal Home Loan Banks Association and insured by the Federal Savings and Loan Insurance Corporation.

The securities used for cash management can go down in value. The market value of debt securities generally varies in response to changes in interest rates and the financial condition of each issuer. During periods of declining interest rates, the value of debt securities generally increases. Conversely, during periods of rising interest rates, the value of these securities generally declines.

B-8

Repurchase Agreements. Each of the Buffalo Funds may invest in issues of the United States Treasury or a United States government agency subject to repurchase agreements. A repurchase agreement involves the sale of securities to a Fund with the concurrent agreement by the seller to repurchase the securities at the Fund’s cost plus interest at an agreed rate upon demand or within a specified time, thereby determining the yield during the Fund’s period of ownership. The result is a fixed rate of return insulated from market fluctuations during such period. Under the 1940 Act, repurchase agreements are considered loans by a Fund.

The Funds will enter into repurchase agreements only with United States banks having assets in excess of $1 billion, which are members of the Federal Deposit Insurance Corporation, and with certain securities dealers who meet the qualifications as set from time to time by the Funds’ Board Members. The term to maturity of a repurchase agreement normally will be no longer than a few days.

The use of repurchase agreements involves certain risks. For example, if the seller of the agreement defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, a Fund may incur a loss when the securities are sold. If the seller of the agreement becomes insolvent and subject to liquidation or reorganization under the Bankruptcy Code or other laws, disposition of the underlying securities may be delayed pending court proceedings. Finally, it is also possible that a Fund may not be able to perfect its interest in the underlying securities.

Illiquid Securities. The Funds may invest in illiquid securities, but these investments will not exceed more than 15% of a Fund’s net assets. The Funds consider a security to be illiquid if it cannot, due to restrictions on trading or lack of trading and not market action, be sold or disposed of in the ordinary course of business within seven days at approximately the price at which a Fund has valued the security.

Illiquid securities include repurchase agreements and time deposits with notice/termination dates of more than seven days, certain variable-amount master demand notes that cannot be called within seven days, certain insurance funding agreements, certain unlisted over-the-counter options and other securities that are traded in the U.S. but are subject to trading restrictions because they are not registered under the Securities Act of 1933, as amended (the “1933 Act”). Because illiquid securities may be difficult to sell at an acceptable price, they may be subject to greater volatility, which may result in a loss to the Fund.

Restricted Securities. The Funds may invest in securities that are subject to restrictions on resale because they have not been registered under the 1933 Act. These securities are sometimes referred to as private placements. Although securities which may be resold only to “qualified institutional buyers” in accordance with the provisions of Rule 144A under the 1933 Act are technically considered “restricted securities,” the Funds may purchase Rule 144A securities without regard to the limitation on investments in illiquid securities described above in the Illiquid Securities section, provided that a determination is made that such securities have a readily available trading market. The Funds may also purchase certain commercial paper issued in reliance on the exemption from regulations in Section 4(2) of the 1933 Act (“4(2) Paper”). The Advisor will determine the liquidity of Rule 144A securities and 4(2) Paper under the supervision of the Funds’ Boards. The liquidity of Rule 144A securities and 4(2) Paper will be monitored by the Advisor, and if as a result of changed conditions, it is determined that a Rule 144A security or 4(2) Paper is no longer liquid, a Fund’s holdings of illiquid securities will be reviewed to determine what, if any, action is required to assure that the Fund does not exceed its applicable percentage limitation for investments in illiquid securities.

Limitations on the resale of restricted securities may have an adverse effect on the marketability of portfolio securities and a Fund might be unable to dispose of restricted securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemption requirements. A Fund might also have to register such restricted securities in order to dispose of them, resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.

B-9

Temporary Defensive Position. The Funds generally hold some cash, short-term debt obligations, government securities, money market instruments or high quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when a Fund attempts to respond to adverse market, economic, political or other conditions by investing up to 100% of its assets in those types of investments for temporary defensive purposes. During those times, a Fund will not be able to pursue its primary investment objective, and, instead, will focus on preserving its assets. Also, a temporary defensive strategy still has the potential to lose money.

Other Investment Companies. Each Fund may invest a portion of its assets in shares of other investment companies, including money market mutual funds, other mutual funds or Exchange-Traded Funds (“ETFs”). A Fund’s investments in money market mutual funds may be used for cash management purposes and to maintain liquidity in order to satisfy redemption requests or pay unanticipated expenses. The Funds limit their investments in securities issued by other investment companies in accordance with the 1940 Act. Section 12(d)(1) of the 1940 Act precludes a Fund from acquiring (i) more than 3% of the total outstanding shares of another investment company; (ii) shares of another investment company having an aggregate value in excess of 5% of the value of the total assets of the Fund; or (iii) shares of another registered investment company and all other investment companies having an aggregate value in excess of 10% of the value of the total assets of the Fund. However, Section 12(d)(1)(F) of the 1940 Act provides that the provisions of paragraph 12(d) shall not apply to securities purchased or otherwise acquired by a Fund if (i) immediately after such purchase or acquisition not more than 3% of the total outstanding shares of such investment company is owned by the Fund and all affiliated persons of the Fund; and (ii) the Fund has not offered or sold, and is not proposing to offer or sell its shares through a principal underwriter or otherwise at a public or offering price that includes a sales load of more than 1 1/2%.

If a Fund invests in investment companies pursuant to Section 12(d)(1)(F), it must comply with the following voting restrictions: when such Fund exercises voting rights, by proxy or otherwise, with respect to investment companies owned by the Fund, the Fund will either seek instruction from the Fund’s shareholders with regard to the voting of all proxies and vote in accordance with such instructions, or vote the shares held by the Fund in the same proportion as the vote of all other holders of such security. In addition, an investment company purchased by a Fund pursuant to Section 12(d)(1)(F) shall not be required to redeem its shares in an amount exceeding 1% of such investment company’s total outstanding shares in any period of less than thirty days. In addition to the advisory and operational fees a Fund bears directly in connection with its own operation, a Fund also bears its pro rata portion of the advisory and operational expenses of each other investment company. Additionally, if a Fund has an investment policy of investing at least 80% of its assets in a particular type of security, such Fund will not include its investments in other investment companies for the purpose of such policy.

A Fund’s investment in other investment companies may consist of shares of ETFs. ETFs are derivative securities whose value tracks a well-known securities index or basket of securities. A Fund’s investments in ETFs are subject to its limitations on investments in other investment companies. The shares of an ETF may be assembled in a block (typically 50,000 shares) known as a creation unit and redeemed in kind for a portfolio of the underlying securities (based on the ETF’s net asset value) together with a cash payment generally equal to accumulated dividends as of the date of redemption. Conversely, a creation unit may be purchased from the ETF by depositing a specified portfolio of the ETF’s underlying securities, as well as a cash payment generally equal to accumulated dividends of the securities (net of expenses) up to the time of deposit. A Fund’s ability to redeem creation units may be limited by the 1940 Act, which provides that the ETFs will not be obligated to redeem shares held by a Fund in an amount exceeding one percent of their total outstanding securities during any period of less than 30 days.

FUNDAMENTAL INVESTMENT RESTRICTIONS.

The Boards of the Buffalo Funds have adopted the following investment restrictions as fundamental policies for each of the respective Buffalo Funds as stated below. These investment restrictions cannot be changed without the approval of a majority of the outstanding voting securities of the applicable Fund, which means, under the 1940 Act, the vote of (1) more than 50% of the outstanding voting securities of a Fund or (2) 67% or more of the voting securities of a Fund present at a meeting, if the holders of more than 50% of the outstanding voting securities are present or represented by proxy at the meeting, whichever is less. Many of these investment restrictions recite the current legal or regulatory requirements. When the legal or regulatory requirements change, a Fund’s applicable investment restrictions may also be modified to reflect the new legal or regulatory requirements without seeking shareholder approval, so long as any such modification is consistent with a Fund’s investment objective, strategies and policies.

B-10

Buffalo Balanced, Buffalo High Yield, Buffalo Large Cap and Buffalo USA Global Funds. These four Buffalo Funds will not:

(1)

As to 75% of their respective total assets, purchase the securities of any one issuer, except the United States government, if immediately after and as a result of such purchase (a) the value of the Fund’s holdings in the securities of such issuer exceeds 5% of the value of the Fund’s total assets, or (b) the Fund owns more than 10% of the outstanding voting securities, or any other class of securities, of such issuer;

(2)

Engage in the purchase or sale of real estate (unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent a Fund from investing in issuers which invest, deal or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein), commodities (unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent a Fund from engaging in transactions in securities secured by physical commodities) or futures contracts;

(3)	Underwrite the securities of other issuers (except that a Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the Securities Act of 1933);

(4)	Make loans to any of its officers, directors or employees, or to its manager, general distributor or officers or directors thereof;

(5)	Make any loan (the purchase of a security subject to a repurchase agreement or the purchase of a portion of an issue of publicly distributed debt securities is not considered the making of a loan);

(6)	Invest in companies for the purpose of exercising control of management;

(7)	Purchase securities on margin, or sell securities short, except that a Fund may write covered call options;

(8)	Purchase shares of other investment companies except in the open market at ordinary broker’s commission or pursuant to a plan of merger or consolidation; and pursuant to the 1940 Act;

(9)

Invest in the aggregate more than 5% of the value of its gross assets in the securities of issuers (other than federal, state, territorial, or local governments, or corporations, or authorities established thereby), which, including predecessors have not had at least three years of continuous operations;

(10)

Except for transactions in its shares or other securities through brokerage practices, which are considered normal and generally accepted under circumstances existing at the time, enter into dealings with its officers or directors, its manager or underwriter, or their officers or directors, or any organization in which such persons have a financial interest;

(11)

Borrow or pledge its assets under normal circumstances, except up to 10% of its total assets (computed at the lower of fair market value or cost) temporarily for emergency or extraordinary purposes, and not for the purpose of leveraging its investments, and provided further that any borrowing in excess of the 5% of the total assets of a Fund shall have asset coverage of at least 3 to 1;

(12)	Make itself or its assets liable for the indebtedness of others;

(13)	Invest in securities which are assessable or involve unlimited liability;

(14)

Make investments that result in the concentration, as that term is defined by the 1940 Act, any rule or order thereunder or U.S. Securities and Exchange Commission (“SEC”) staff interpretation thereof, of its investments in the securities of issuers primarily engaged in the same industry; this restriction does not limit a Fund from investing in obligations issued or guaranteed by the U.S. Federal Government, or its agencies or instrumentalities; in applying this fundamental policy concerning industry concentration, investments in certain broader categories of companies will not be considered to be investments in the same industry; for example, technology companies will be divided according to their products and services so that hardware, software, information services and outsourcing, and telecommunications will each be considered separate industries; financial service companies will be classified according to the end users of their services so that automobile finance, bank finance and diversified finance will each be considered separate industries; asset-backed securities will be classified according to the underlying assets securing such securities; and utility companies will be divided according to their services so that gas, gas transmission, electric and telephone will each be considered separate industries; the SEC staff has taken the position that a mutual fund concentrates its investments in a particular industry if 25% or more of its total assets are invested in issuers within the same industry or group of related industries; or,

B-11

(15)

Purchase or retain securities of any company in which any Fund officer, director or the Advisor--its partners, officers or director--beneficially own more than 1/2 of 1% of such company’s securities, if all such persons owning more than 1/2 of 1% of such company’s securities, own in the aggregate more than 5% of the outstanding securities of such company.

Buffalo Small Cap Fund. The Buffalo Small Cap Fund will not:

(1)

As to 75% of its total assets, purchase the securities of any one issuer, except the United States government, if immediately after and as a result of such purchase (a) the value of the Fund’s holdings in the securities of such issuer exceeds 5% of the value of the Fund’s total assets, or (b) the Fund owns more than 10% of the outstanding voting securities, or any other class of securities, of such issuer;

(2)

Engage in the purchase or sale of real estate (unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent the Fund from investing in issuers which invest, deal or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein), commodities (unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent the Fund from engaging in transactions in securities secured by physical commodities) or futures contracts;

(3)	Underwrite the securities of other issuers (except that the Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the Securities Act of 1933);

(4)	Make loans to other persons, except by the purchase of debt obligations which are permitted under its policy (the purchase of a security subject to a repurchase agreement or the purchase of a portion of an issue of publicly distributed debt securities is not considered the making of a loan);

(5)	Purchase securities on margin, or sell securities short, except that the Fund may write covered call options;

(6)

Borrow or pledge its credit under normal circumstances, except up to 10% of its total assets (computed at the lower of fair market value or cost) temporarily for emergency or extraordinary purposes, and not for the purpose of leveraging its investments, and provided further that any borrowing in excess of the 5% of the total assets of the Fund shall have asset coverage of at least 3 to 1; or,

(7)

Make investments that result in the concentration, as that term is defined by the 1940 Act, any rule or order thereunder or SEC staff interpretation thereof, of its investments in the securities of issuers primarily engaged in the same industry; this restriction does not limit the Fund from investing in obligations issued or guaranteed by the U.S. Federal Government, or its agencies or instrumentalities; in applying this fundamental policy concerning industry concentration, investments in certain broader categories of companies will not be considered to be investments in the same industry; for example, technology companies will be divided according to their products and services so that hardware, software, information services and outsourcing, and telecommunications will each be considered separate industries; financial service companies will be classified according to the end users of their services so that automobile finance, bank finance and diversified finance will each be considered separate industries; asset-backed securities will be classified according to the underlying assets securing such securities; and utility companies will be divided according to their services so that gas, gas transmission, electric and telephone will each be considered separate industries. The SEC staff has taken the position that a mutual fund concentrates its investments in a particular industry if 25% or more of its total assets are invested in issuers within the same industry or group of related industries.

B-12

Buffalo Micro Cap Fund. The Buffalo Micro Cap Fund will not:

(1)

As to 75% of its total assets, purchase the securities of any one issuer, except the United States government or other investment companies, if immediately after and as a result of such purchase (a) the value of the Fund’s holdings in the securities of such issuer exceeds 5% of the value of the Fund’s total assets, or (b) the Fund owns more than 10% of the outstanding voting securities of such issuer;

(2)

(3)	Underwrite the securities of other issuers (except that the Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the 1933 Act);

(4)

Make loans to other persons, except by the purchase of debt obligations which are permitted under its investment strategies or policies (entry into a repurchase agreement or the purchase of a portion of an issue of publicly distributed debt securities will not be deemed a loan for purposes of this investment restriction);

(5)	Purchase securities on margin, or sell securities short, except that the Fund may write covered call options;

(6)

Borrow or pledge its assets in an amount exceeding 10% of the value of its total assets, and, in the event that market conditions or other factors result in the Fund’s borrowed amounts exceeding 10% of its assets (including the amount borrowed), the Fund will reduce the amount of its borrowing to an extent and in such a manner required by the 1940 Act. The Fund will not borrow for the purposes of leveraging its investments, but only for temporary or emergency purposes; or,

(7)

Make investments that result in the concentration, as that term is defined by the 1940 Act, any rule or order thereunder or SEC staff interpretation thereof, of its investments in the securities of issuers primarily engaged in the same industry; this restriction does not limit the Fund from investing in obligations issued or guaranteed by the U.S. Federal Government, or its agencies or instrumentalities; in applying this fundamental policy concerning industry concentration, investments in certain broader categories of companies will not be considered to be investments in the same industry, for example: technology companies will be divided according to their products and services so that hardware, software, information services and outsourcing, and telecommunications will each be considered separate industries; financial service companies will be classified according to the end users of their services so that automobile finance, bank finance and diversified finance will each be considered separate industries; asset-backed securities will be classified according to the underlying assets securing such securities; and utility companies will be divided according to their services so that gas, gas transmission, electric and telephone will each be considered separate industries. The SEC staff has taken the position that a mutual fund concentrates its investments in a particular industry if 25% or more of its total assets are invested in issuers within the same industry or group of related industries.

Buffalo Mid Cap and Buffalo Science & Technology Funds. Neither of these Buffalo Funds will:

(1)

B-13

(2)

Make investments that result in the concentration, as that term is defined by the 1940 Act, any rule or order thereunder or SEC staff interpretation thereof, of its investments in the securities of issuers primarily engaged in the same industry; this restriction does not limit either Fund from investing in obligations issued or guaranteed by the U.S. Federal Government, or its agencies or instrumentalities; in applying this fundamental policy concerning industry concentration, investments in certain broader categories of companies will not be considered to be investments in the same industry; for example, technology companies will be divided according to their products and services so that hardware, software, information services and outsourcing, and telecommunications will each be considered separate industries; financial service companies will be classified according to the end users of their services so that automobile finance, bank finance and diversified finance will each be considered separate industries; asset-backed securities will be classified according to the underlying assets securing such securities; and utility companies will be divided according to their services so that gas, gas transmission, electric and telephone will each be considered separate industries; the SEC staff has taken the position that a mutual fund concentrates its investments in a particular industry if 25% or more of its total assets are invested in issuers within the same industry or group of related industries;

(3)

Borrow money or issue senior securities, except as the 1940 Act, any rule thereunder, or SEC staff interpretation thereof, may permit; the regulatory limits allow either Fund to borrow up to 5% of its total assets for temporary purposes and to borrow from banks, provided that if borrowings exceed 5%, the Fund must have assets totaling at least 300% of the borrowing when the amount of the borrowing is added to the Fund’s other assets; the effect of this provision is to allow either Fund to borrow from banks amounts up to one-third (33 1/3%) of its total assets, including those assets represented by the borrowing;

(4)	Underwrite the securities of other issuers, except that either Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the Securities Act of 1933;

(5)

Purchase or sell real estate, unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent either Fund from investing in issuers which invest, deal or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein;

(6)

Purchase or sell physical commodities, unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent either Fund from engaging in transactions involving futures contracts and options thereon or investing in securities that are secured by physical commodities; or,

(7)	Make loans, provided that this restriction does not prevent either Fund from purchasing debt obligations, entering into repurchase agreements, and loaning its assets to broker/dealers or institutional investors.

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS.

In addition to the objectives, strategies and policies described in the Prospectus and this SAI and the fundamental investment restrictions described above, the Boards of the Buffalo Funds have adopted the following investment restrictions as non-fundamental policies for the respective Buffalo Funds. A Fund’s Board may change these non-fundamental investment restrictions without shareholder approval.

Buffalo Balanced, Buffalo High Yield, Buffalo Large Cap and Buffalo USA Global Funds. These four Buffalo Funds are permitted to invest in other investment companies on the open market, including open-end, closed-end or unregistered investment companies, either within the percentage limits set forth in the 1940 Act, any rule or order thereunder or SEC staff interpretation thereof or without regard to such percentage limits in connection with a corporate event (meaning a merger, reorganization, consolidation or similar transaction). Current regulatory limits allow a Fund to invest, outside of a corporate event, up to 5% of its total assets in the securities of any one investment company, without owning more than 3% of any investment company or having more than 10% of its total assets in the securities of other investment companies. The Funds currently operate in accordance to the limit exemption provided by Section 12(d)(1)(F) of the 1940 Act. These Funds also may not operate as a fund of funds that invests primarily in the shares of other investment companies as permitted by Section 12(d)(1)(G) of the 1940 Act, if its own shares are utilized as investments by such a fund of funds.

B-14

Buffalo Small Cap Fund. The Buffalo Small Cap Fund will not:

(1)	Invest in companies for the purpose of exercising control of management;

(2)	Purchase shares of other investment companies except in the open market at ordinary broker’s commission or pursuant to a plan of merger or consolidation;

(3)

(4)

Except for transactions in its shares or other securities where such person is acting as broker and the brokerage fees and practices are considered normal and generally accepted under the circumstances existing at the time, enter into dealings with its officers or directors, its manager or underwriter, or their officers or directors, or any organization in which such persons have a financial interest.

Buffalo Science & Technology Fund. The Buffalo Science & Technology Fund will not:

(1)

Invest in other investment companies, including open-end, closed-end or unregistered investment companies, outside of a corporate event (meaning a merger, reorganization, consolidation or similar transaction), beyond the current regulatory limits, which allow the Fund to invest up to 5% of the Fund’s total assets in the securities of any one investment company, without owning more than 3% of any investment company or having more than 10% of its total assets in the securities of other investment companies, or operate as a fund of funds that invests primarily in the shares of other investment companies as permitted by Section 12(d)(1)(G) of the 1940 Act, if its own shares are utilized as investments by such a fund of funds; or,

(2)	Invest more than 15% of its net assets in securities that it cannot sell or dispose of in the ordinary course of business within seven days, due to restricted trading, at approximately the value at which the Fund has valued the investment; or,

(3)	Borrow for the purpose of leveraging its investments; in this regard, the Fund will not purchase portfolio securities when borrowings exceed 5% of its total assets.

Buffalo Micro Cap Fund. The Buffalo Micro Cap Fund will not:

(1)	Invest in companies for the purpose of exercising control of management;

(2)

Except for transactions in its shares or other securities where such person is acting as broker and the brokerage fees and practices are considered normal and generally accepted under the circumstances existing at the time, enter into dealings with its officers or Trustees, its manager or underwriter, or their officers or directors, or any organization in which such persons have a financial interest;

(3)

Invest more than 15% of its net assets in illiquid securities. The Fund considers a security to be illiquid if it cannot, due to restrictions on trading or lack of trading and not market action, be sold or disposed of in the ordinary course of business within seven days at approximately the price at which the Fund has valued the security;

(4)	Make any changes in its investment policy of investing at least 80% of its net assets in equity securities of micro-cap companies without first providing the Fund’s shareholders with at least 60 days’ prior notice; or

(5)	Purchase additional securities when outstanding borrowings exceed 5% of the Fund’s total assets.

Buffalo Mid Cap Fund. The Buffalo Mid Cap Fund will not:

(1)

(2)	Borrow for the purpose of leveraging its investments; in this regard, the Fund will not purchase portfolio securities when borrowings exceed 5% of its total assets.

B-15

PORTFOLIO TURNOVER.

Although the Funds generally will not invest for short-term trading purposes, portfolio securities may be sold without regard to the length of time they have been held when, in the opinion of the Advisor, investment considerations warrant such action. Portfolio turnover rate is calculated by dividing (1) the lesser of purchases or sales of portfolio securities for the fiscal year by (2) the monthly average of the value of portfolio securities owned during the fiscal year. A 100% turnover rate would occur if all the securities in a Fund’s portfolio, with the exception of securities whose maturities at the time of acquisition were one year or less, were sold and either repurchased or replaced within one year. A high rate of portfolio turnover (100% or more) generally leads to higher transaction costs and may result in a greater number of taxable transactions.

The portfolio turnover for the Funds as of the fiscal year ended March 31, 2004 and 2005 were the following:

Name of Fund	Portfolio Turnover
	2004	2005
Buffalo Balanced	32%
Buffalo High Yield	51%
Buffalo Large Cap	41%
Buffalo Micro Cap*	N/A
Buffalo Mid Cap	24%
Buffalo Science & Technology	38%
Buffalo Small Cap	22%
Buffalo USA Global	21%

* The Buffalo Micro Cap Fund commenced operations on May 21, 2004.

FUND SECURITIES TRANSACTIONS

The Advisor makes the decisions about buying and selling securities for the Buffalo Funds. It selects brokers and dealers to execute securities transactions, allocates portfolio brokerage and principal business and negotiates commissions and prices for securities. In instances where securities are purchased on a commission basis, the Advisor seeks best execution of transactions at competitive and reasonable commission rates based on all circumstances related to the trade. The Funds paid the following brokerage commissions for the time periods stated:

Name of Fund	Fiscal Year Ended March 31, 2003	Fiscal Year Ended March 31, 2004	Fiscal Year Ended March 31, 2005
Buffalo Balanced	$10,775	$24,193
Buffalo High Yield	$11,064	$36,522
Buffalo Large Cap	$28,317	$46,208
Buffalo Micro Cap*	N/A	N/A
Buffalo Mid Cap	$41,861	$96,867
Buffalo Science & Technology	$30,028	$44,380
Buffalo Small Cap	$756,190	$1,135,669
Buffalo USA Global	$41,455	$64,412

* Buffalo Micro Cap Fund commenced operations on May 21, 2004.

The level of brokerage commissions generated by a Fund is directly related to the number and the size of the buy and sell transactions into which the Fund enters. The frequency and size of these transactions are affected by various factors such as cash flows into and out of a Fund, the Advisor’s interpretation of the market or economic environment, etc.

B-16

The Funds believe it is in their best interest to have a stable and continuous relationship with a diverse group of financially strong and technically qualified broker dealers who will provide quality executions at competitive rates. Broker dealers meeting these qualifications also will be selected for their demonstrated loyalty to the respective Fund, when acting on its behalf, as well as for any research or other services provided to the respective Fund. The Funds may execute a substantial portion of the portfolio transactions through brokerage firms that are members of the New York Stock Exchange or through other major securities exchanges. When buying securities in the over-the-counter market, the Funds will select a broker who maintains a primary market for the security unless it appears that a better combination of price and execution may be obtained elsewhere. The Funds will not normally pay a higher commission rate to broker dealers providing benefits or services to it than it would pay to broker dealers who did not provide such benefits or services. However, the Funds reserve the right to do so within the principles set out in Section 28(e) of the Securities Exchange Act of 1934 when it appears that this would be in the best interests of the shareholders.

No commitment is made to any broker or dealer with regard to placing of orders for the purchase or sale of Fund portfolio securities, and no specific formula is used in placing such business. Allocation is reviewed regularly by both the Funds’ Boards and the Advisor.

Since the Funds do not market their shares through intermediary brokers and dealers, it is not the Funds’ practice to allocate brokerage or principal business on the basis of sales of their shares that may be made through such firms. However, they may place portfolio orders with qualified broker dealers who recommend the Funds to their clients, or who act as agent in the purchase of the Funds’ shares for their clients.

Research services furnished by broker dealers may be useful to the Advisor in serving other clients, as well as the respective Buffalo Funds. Likewise, the Funds may benefit from research services obtained by the Advisor from the placement of its other clients’ portfolio brokerage.

When the Advisor, in its fiduciary capacity, believes it to be in the best interest of a Fund’s shareholders, a Fund may join with the Advisor’s other clients in acquiring or disposing of a security. Securities acquired or proceeds obtained will be equitably distributed among the Fund and the Advisor’s other clients participating in such a transaction. In some instances, this investment procedure may affect the price paid or received by a Fund or the size of the position obtained by a Fund.

The table below indicates the total amount of brokerage commissions paid for each Fund for research services and total related portfolio transactions for the fiscal year ended March 31, 2005. Research services were not necessarily a factor in the placement of brokerage business.

Fund Name	Commissions	Transactions
Buffalo Balanced
Buffalo High Yield
Buffalo Large Cap
Buffalo Micro Cap
Buffalo Mid Cap
Buffalo Science & Technology
Buffalo Small Cap
Buffalo USA Global

The Buffalo Balanced Fund and the Buffalo High Yield Fund own securities of their regular broker-dealers. As of the fiscal year ended March 31, 2005, the Funds owned the following dollar amounts of securities of each Fund’s regular broker-dealers:

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Buffalo Balanced	Amounts
Citigroup/Smith Barney	$

Buffalo High Yield	Amounts
Bank of America Corp.	$

Except as noted above, none of the Funds owned any securities of their regular broker-dealers as of the end of the last fiscal year.

PURCHASING AND SELLING SHARES

PURCHASES.

Neither the Funds nor the entities that provide services to them (the “Fund Complex”) will be responsible for the consequences of delays, including delays in the banking or Federal Reserve wire systems. The Funds cannot process transaction requests that are not completed properly. If you use the services of any other broker to purchase or redeem shares of the Fund, that broker may charge you a fee. Shares of the Funds may be purchased directly from the Fund without these fees. Each order accepted will be fully invested in whole and fractional shares of the Funds, unless the purchase of a certain number of whole shares is specified, at the net asset value per share next effective after the order is accepted by the Fund.

Each investment is confirmed by a year-to-date statement that provides the details of the immediate transaction, plus all prior transactions in the account for the current year. This includes the dollar amount invested, the number of shares purchased or redeemed, the price per share, and the aggregate shares owned. A transcript of all activity in the account during the previous year will be furnished each January. By retaining each annual summary and the last year-to-date statement, a customer will have a complete detailed history of the account that also provides necessary tax information. A duplicate copy of a past annual statement, prior to May 1, 2003, is available from Jones & Babson, Inc. at its cost, subject to a minimum charge of $5 per account, per year requested. Annual statements after May 1, 2003 are available from U.S. Bancorp Fund Services, LLC at its cost, subject to a minimum charge of $5 per account, per year requested.

The shares you purchase are held by the Fund in book form, thereby relieving you of the responsibility of providing for the safekeeping of a negotiable share certificate. The Funds will not issue share certificates.

The Fund Complex reserves the right in its sole discretion to withdraw all or any part of the offering made by the Prospectus or to reject purchase orders when, in the judgment of Funds management, such withdrawal or rejection is in the best interest of the Funds and their shareholders.

The Fund Complex reserves the right to refuse to accept orders for Fund shares unless accompanied by payment, except when a responsible person has agreed to indemnify the Funds against losses resulting from the failure of investors to make payment. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. To recover any such loss, the Fund Complex reserves the right to redeem shares owned/held by any purchaser whose order is canceled. The purchaser may also be prohibited from or restricted in placing further orders.

SALES (REDEMPTIONS).

The Fund Complex will not be responsible for the consequences of delays that are out of its immediate control, including delays in the banking or Federal Reserve wire systems. The Funds cannot process transaction requests that are not completed properly.

The Fund Complex may suspend the right of redemption or postpone the date of payment beyond the normal three-day redemption period under the following conditions authorized by the 1940 Act: (1) for any period (a) during which the New York Stock Exchange is closed, other than customary weekend and holiday closing, or (b) during which trading on the New York Stock Exchange is restricted; (2) for any period during which an emergency exists as a result of which (a) disposal of a Fund’s securities is not reasonably practical, or (b) it is not reasonably practical for a Fund to determine the fair value of its net assets; (3) under certain circumstances where certain shareholders are attempting to “time the market” (see “Market Timers” below”) by purchasing and redeeming shares of a Fund on a regular basis; or (4) for such other periods as the Securities and Exchange Commission may by order permit for the protection of a Fund’s shareholders.

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The Funds have elected to be governed by Rule 18f-1 under the 1940 Act, pursuant to which the Funds are obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of a Fund’s net asset value during any 90-day period for any one shareholder. Should redemptions by any shareholder exceed such limitation, a Fund may redeem the excess in kind. If shares are redeemed in kind, the redeeming shareholder will incur expenses converting the securities into cash and would bear any market risk until such securities are converted into cash.

MARKET TIMERS.

The Funds’ Board of Directors/Trustees has adopted policies and procedures with respect to frequent purchases and redemptions of Fund shares by Fund shareholders. These policies are summarized below and are implemented in part, through the Funds’ redemption fee which is described in the Prospectus.

Frequent purchases and redemptions of a Fund’s shares may present certain risks for the Fund and its shareholders. These risks may include, among other things, dilution in the value of Fund shares held by long-term shareholders, interference with the efficient management of the Fund’s portfolios and increased brokerage and administrative costs. A Fund may have difficulty implementing long-term investment strategies if it is unable to anticipate what portion of its assets it should retain in cash to provide liquidity to its shareholders.

The Funds do not allow market timers. A Fund may refuse to sell shares to market timers and will take actions necessary to stop market timing activity, including closing any account to new purchases believed to be held by or for a market timer. You will be considered a market timer if you have (i) requested a redemption or exchange of Fund shares within 90 days of an earlier purchase or exchange request, (ii) make investments of large amounts followed by a redemption or exchange request shortly after the purchase or (iii) otherwise seem to follow a timing pattern. Shares under common ownership or control are combined for these purposes.

ANTI-MONEY LAUNDERING PROGRAM.

The Funds are required to comply with various federal anti-money laundering laws and regulations. Consequently, the Funds may be required to “freeze” the account of a shareholder if the shareholder appears to be involved in suspicious activity or if certain account information matches information on government lists of known terrorists or other suspicious persons, or the Funds may be required to transfer the account or proceeds of the account to a government agency. In addition, pursuant to the Funds’ Customer Identification Program, the Funds’ Transfer Agent will complete a thorough review of all new opening account applications and will not transact business with any person or entity whose identity cannot be adequately verified.

NET ASSET VALUE.

The net asset value and offering price of shares of the Funds will be determined once daily as of the close of public trading on the New York Stock Exchange (“NYSE”) (4:00 p.m., Eastern time) on each day that the NYSE is open for trading. The Funds do not expect to determine the net asset value of their shares on any day when the NYSE is not open for trading, days on which changes in the value of portfolio securities will not materially affect a Fund’s net asset value, days during which a Fund receives no purchase or redemption orders, customary holidays and days when the national securities exchanges are not open for unrestricted trading. The Funds do not compute their net asset value on days when the New York Stock Exchange is closed or on the following customary holidays:

New Year’s Day January 1

Martin Luther King Jr. Day Third Monday in January

Presidents’ Day Third Monday in February

Good Friday Friday before Easter

Memorial Day Last Monday in May

Independence Day July 4

Labor Day First Monday in September

Thanksgiving Day Fourth Thursday in November

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In valuing the Funds’ assets for calculating net asset value, readily marketable portfolio securities listed on a national securities exchange (including ADRs) are valued at the last sale price on the business day as of which such value is being determined. Fund securities listed on the Nasdaq Stock Market, Inc. (“NASDAQ”) will be valued at the NASDAQ Official Closing Price, which may not necessarily represent the last sale price. If there has been no sale on such exchange or on NASDAQ on such day, the security is valued at the closing bid price on such day. Readily marketable securities traded only in the over-the-counter market and not on NASDAQ are valued at the current or last bid price. If no bid is quoted on such day, the security is valued by such method as the Board of Directors/Trustees of the Funds shall determine in good faith to reflect the security’s fair value. Debt securities with remaining maturities of 60 days or less are normally valued at amortized cost, unless the Board of Directors/Trustees determined that amortized cost does not represent fair value. Cash and receivables will be valued at their face amounts. Interest will be recorded as accrued, and dividends will be recorded on their ex-dividend date. All other assets of the Funds are valued in such manner as the Board of Directors/Trustees in good faith deems appropriate to reflect their fair value.

The net asset value per share of each Fund is calculated as follows: all liabilities incurred or accrued are deducted from the valuation of total assets which includes accrued but undistributed income; the resulting net assets are divided by the number of shares of the Fund outstanding at the time of the valuation and the result (adjusted to the nearest cent) is the net asset value per share.

Net Assets	=	Net Asset Value per share
Shares Outstanding

An example of how each Fund calculated its net asset value per share as of March 31, 2005 is as follows:

Buffalo Balanced Fund

$	=	$

Buffalo High Yield Fund

$	=	$

Buffalo Large Cap Fund

$	=	$

Buffalo Mid Cap Fund

$	=	$

Buffalo Science & Technology Fund

$	=	$

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Buffalo Small Cap Fund

$	=	$

Buffalo USA Global Fund

$	=	$

ADDITIONAL PURCHASE AND REDEMPTION POLICIES.

The Funds reserve the right to:

(1)	Waive or increase the minimum investment requirements with respect to any person or class of persons, which include shareholders that invest through any of the Funds’ special investment programs;

(2)	Cancel or change the telephone investment service, the telephone exchange service, Internet service, the automatic monthly investment plan, systematic redemption plan or monthly exchange privilege without prior notice when doing so is in the best interest of a Fund and its shareholders;

(3)	Begin charging a fee for the telephone investment service or the automatic monthly investment plan and to cancel or change these services upon 15 days written notice to you;

(4)	Begin charging a fee for the telephone service and to cancel or change the service upon 60 days written notice to you;

(5)	Begin charging a fee for the systematic redemption plan upon 30 days written notice to you;

(6)

Waive signature guarantee requirements in certain instances where it appears reasonable to do so and will not unduly affect the interests of other shareholders; the Funds may waive the signature guarantee requirement if you authorize the telephone redemption method at the same time you submit the initial application to purchase shares; and

(7)	Require signature guarantees if there appears to be a pattern of redemptions designed to avoid the signature guarantee requirement, or if a Fund has other reason to believe that this requirement would be in the best interest of its shareholders.

MANAGEMENT OF THE FUNDS

DIRECTORS AND OFFICERS.

Each Fund is governed by a Board of Directors or Board of Trustees (“Board of Directors”), who are responsible for protecting the interests of Fund shareholders under the laws of Maryland (or Delaware, with regard to the Trustees of the Buffalo Micro Cap, Buffalo Mid Cap and Buffalo Science & Technology Funds). The Directors or Trustees (“Directors”) are experienced business persons, who meet throughout the year to oversee the Funds’ activities, review contractual arrangements with companies that provide services to the Funds, and to review performance. The officers of the Funds are responsible for supervising the Funds’ business operations, but the Funds are managed by the Advisor, KCM, subject to the supervision and control of the Directors.

The Boards of each of the Buffalo Funds have reviewed and approved their respective Fund’s investment advisory contract(s) with the Advisor. In approving these agreements, the Boards examined the Advisor’s fees, the Advisor’s ability to invest on behalf of the Funds and the management, advisory and administrative services that the Advisor provides and/or obtains on behalf of the Funds. With respect to each Fund other than the Buffalo Micro Cap Fund, the Board also reviewed reports that compared the Funds’ performance to other mutual funds. These reports showed that the Fund generally performed very well within each of their categories on both a relative and absolute basis. With respect to each Fund, including the Buffalo Micro Cap Fund, the Board also examined reports that compared the Fund’s management fees and overall expenses with those of similar mutual funds. Since each of the Funds has a unitary management fee covering substantially all services and expenses of the Funds, the Board focused on the overall expenses of each Fund, noting that each Fund, except the Buffalo High Yield Fund and the Buffalo Micro Cap Fund, had total expenses below the median of its peer group. With respect to the Buffalo High Yield Fund, the Board considered that the fees were only slightly more than the median of its peer group. With respect to the Buffalo Micro Cap Fund, the Board concluded that while the fees paid to the Advisor for its services to the Buffalo Micro Cap Fund were higher than fees typically paid by other mutual funds, the fees were comparable to other micro-cap funds considering (1) the level of services to be provided, (2) the research intensive investing strategies that will be utilized, (3) the specialized skill required, and (4) the level of resources available to the Advisor to implement its strategies. In addition, it was noted that the management fee paid to the Advisor is used to cover the expenses of the Fund’s administrative, transfer agency and other fund expenses. After looking at all of these factors, the Boards determined, in each case, that the Advisor’s fees are reasonable and that the services that the Advisor provides to the Funds meet or exceed industry standards.

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In addition to its fees, the Advisor benefits through its relationship with the Funds by participating in soft dollar arrangements with brokers to whom the Advisor sends Fund business-orders to buy and sell securities on behalf of the Funds. These arrangements, including free research and other incentives, are not uncommon in the industry, and the Funds’ Boards periodically receive and review information from the Advisor regarding its soft dollar arrangements related to Fund business. In some cases, the Advisor may also receive free research and incentives via business it directs to brokers that is not Fund related. In these cases, the Funds may benefit from the soft dollar arrangement even though its business did not create the opportunity for the Advisor to participate in the arrangement.

NAME, AGE AND ADDRESS	POSITION(S) HELD WITH FUNDS	TERM OF OFFICE AND LENGTH OF TIME SERVED	PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS	NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR	OTHER DIRECTORSHIPS HELD BY DIRECTOR
INTERESTED DIRECTORS
Kent W. Gasaway¹ (44) 5420 West 61^st Place Shawnee Mission, KS 66205	Director	Indefinite term and served since inception.	Senior Vice President/Portfolio Manager, Kornitzer Capital Management, Inc. (management company).	Eight	None
	President and Treasurer	One year term and served since May 2003.

B-22

Joseph C. Neuberger¹ (41) 615 E. Michigan Street, Milwaukee, WI 53202	Director	Indefinite term and served since May 2003.	Senior Vice President, U.S. Bancorp Fund Services, LLC (1994 - present)	Eight	Trustee, MUTUALS.com (an open-end investment company with four portfolios); Trustee, Zodiac Trust (an open-end investment company with one portfolio)
	Chairman	One year term and served since May 2003.		Eight
NON-INTERESTED DIRECTORS
Thomas S. Case (63) 515 Piney Creek Road Reno, NV 89511	Director	Indefinite term and served since inception.	Retired	Eight	None
Gene M. Betts (52) Sprint Corporation 6200 Sprint Parkway Overland Park, KS 66521	Director	Indefinite term and served since February 2001.	Senior Vice President and Treasurer, Sprint Corp. (telecommunications company).	Eight	Director, Garmm Ltd (a global positioning equipment company)
J. Gary Gradinger (59) Golden Star Inc. 400 East 10^th Avenue North Kansas City, MO 64116	Director	Indefinite term and served since February 2001.	Chairman, President and Chief Executive Officer, Golden Star Inc. (manufacturer of textile cleaning products)	Eight	None
Philip J. Kennedy (57) Department of Business Administration Penn State Shenango 147 Shenango Avenue Sharon, PA 16146	Director	Indefinite term and served since May 1995.	Internship Coordinator and Instructor in the Department of Business Administration, Penn State Shenango; Associate Professor and Chair of Accounting, Business Administration and Entrepreneurship, Benedictine College; formerly Associate Professor, Slippery Rock University; Director, Great Plains Trust Company.	Eight	None

B-23

OFFICERS
Katharine A. Barry (30) 615 E. Michigan Street Milwaukee, WI 53202	Vice President and Compliance Officer	One year term and served since May 2003.	Assistant Vice President, U.S. Bancorp Fund Services, LLC since 1998.	N/A	N/A
Chad E. Fickett (30) 615 E. Michigan Street Milwaukee, WI 53202	Secretary	One year term and served since November 2003.	Assistant Vice President, U.S. Bancorp Fund Services, LLC since July 2000.	N/A	N/A

¹Each of these Directors may be deemed to be an “interested person” of the Funds as that term is defined in the 1940 Act, as amended. Messrs. Neuberger and Gasaway are interested Directors due to their employment by U.S. Bancorp Fund Services, LLC and Kornitzer Capital Management, Inc., respectively. U.S. Bancorp Fund Services, LLC is the Funds’ Registered Transfer Agent and an affiliate of the Fund’s underwriter. Kornitzer Capital Management, Inc. is the Funds’ Advisor.

As of December 31, 2004, the Directors had the following interests in the Buffalo Funds’ securities:

NAME OF DIRECTOR/TRUSTEE	DOLLAR RANGE OF EQUITY SECURITIES IN EACH FUND	AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL REGISTERED INVESTMENT COMPANIES OVERSEEN BY DIRECTOR IN FAMILY OF INVESTMENT COMPANIES
Joseph C. Neuberger	Balanced: None High Yield: None Large Cap: None Micro cap None Mid Cap: None Science & Tech: None Small Cap: None USA Global: None	None
Kent W. Gasaway	Balanced: $ High Yield: Large Cap: $ Micro cap Mid Cap: $ Science & Tech: $ Small Cap: USA Global:
Thomas S. Case	Balanced: $ High Yield: $ Large Cap: $ Micro cap Mid Cap: None Science & Tech: None Small Cap: None USA Global: $
Gene M. Betts	Balanced: None High Yield: None Large Cap: None Micro cap Mid Cap: $ Science & Tech: None Small Cap: None USA Global: None

B-24

J. Gary Gradinger	Balanced: None High Yield: None Large Cap: None Micro cap Mid Cap: None Science & Tech: None Small Cap: None USA Global: $
Philip J. Kennedy	Balanced: High Yield: $ Large Cap: None Micro cap Mid Cap: $ Science & Tech: $ Small Cap: $ USA Global: $

AUDIT COMMITTEE.

The Funds have an Audit Committee, which assists the Funds’ Boards in fulfilling their duties relating to each Fund’s accounting and financial reporting practices, and also serves as a direct line of communication between the Boards and the independent registered public accounting firm. The Audit Committee is comprised of Messrs. Case, Betts, Gradinger and Kennedy, the Funds’ Independent Directors. The specific functions of the Audit Committee include recommending the engagement or retention of the independent registered public accounting firm, reviewing with the independent registered public accounting firm the plan and results of the auditing engagement, approving professional services provided by the independent registered public accounting firm prior to the performance of such services, considering the range of audit and non-audit fees, reviewing the independence of the independent registered public accounting firm, reviewing the scope and results of the Funds’ procedures for internal auditing, and reviewing the Funds’ system of internal accounting controls. The Audit Committee met once during the last fiscal year.

COMPENSATION.

The Funds do not directly compensate any Director or Fund officer for their normal duties and services. Mr. Gasaway and Mr. Neuberger, who are interested Directors due to their employment with the Funds’ Advisor and U.S. Bancorp Fund Services, LLC, respectively, are compensated by those organizations and not by the Funds. U.S. Bancorp Fund Services, LLC is an affiliate of the Funds’ underwriter. The fees of the Independent Directors, including travel and other expenses related to the Board meetings, are paid by the Advisor pursuant to the provisions of the Funds’ Management Agreements.

Each Independent Director receives an annual retainer of $3,000, plus $125 for each Fund Board meeting attended. Each of the Funds’ Boards generally meets four times each year. The following chart sets forth the Independent Directors’ annual compensation, all of which is paid by the Advisor.

Name of Person, Position	Aggregate Compensation from the Fund¹	Pension or Retirement Benefits Accrued As Part of Funds Expenses	Total Compensation From Funds and Fund Complex² Paid to Directors
Thomas S. Case, Director	$	-0-	$
Gene M. Betts, Director	$	-0-	$

B-25

J. Gary Gradinger, Director	$	-0-	$
Philip J. Kennedy, Director	$	-0-	$

¹These figures represent the annual aggregate compensation by the Fund Complex for the fiscal year ended March 31, 2005.

²The Fund Complex is currently comprised of six separate investment companies with multiple Boards of Directors.

PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES

The Funds disclose a complete list of their holdings four times in each fiscal year, as of the end of each quarter. The lists appear in the Funds’ First Quarter, Semi-Annual, Third Quarter and Annual Reports to shareholders. The Funds file the lists with the SEC on Form N-CSR (second and fourth quarters) and Form N-Q (first and third quarters), and the Semi-Annual and Annual Reports to Shareholders are mailed to all shareholders of record. Shareholders may view the Funds’ Forms N-CSR and N-Q on the SEC’s web site at www.sec.gov. Forms N-CSR and N-Q may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling 1-202-942-8090 (direct) or 1-800-SEC-0330 (general SEC number).

The Funds may provide, at any time, portfolio holdings information to their service providers, such as the Funds’ Advisor, transfer agent, custodian/fund accounting agent, financial printer, pricing services, auditors, and proxy voting services, as well as to state and federal regulators and government agencies, and as otherwise required by law or judicial process. These service providers are subject to duties of confidentiality, including a duty not to trade on non-public information, imposed by law and/or contract.

Additionally, the Funds may provide information regarding their portfolio holdings to shareholders, firms and institutions before their public disclosure is required or authorized as discussed above, provided that: (i) the recipient makes a specific request to the Fund for the information and the Chief Compliance Officer of the Fund determines that the Fund has a legitimate business purpose for disclosing the non-public portfolio holdings information to the recipient; and (ii) the recipient signs a written confidentiality agreement that provides that the non-public portfolio holdings information will be kept confidential, will not be used for trading purposes and will not be disseminated or used for any purpose other than the purpose for which it was approved. Persons and entities unwilling to execute a confidentiality agreement that is acceptable to the Funds may only receive portfolio holdings information that has otherwise been publicly disclosed. Non-public portfolio holdings will not be disclosed to members of the media under any circumstance.

Exceptions to, or waivers of, the Funds’ policy on portfolio disclosures may only be made by the Funds’ Chief Compliance Officer and must be disclosed to the Funds’ Board of Directors at its next regularly scheduled quarterly meeting. The Board is also responsible for reviewing any potential conflict of interest between the interests of the Funds’ shareholders and a third party with respect to the disclosure of non-public portfolio holdings information prior to its dissemination, and reviews the operation and effectiveness of the Funds’ portfolio disclosure policy on an annual basis.

INVESTMENT ADVISOR AND MANAGER.

Kornitzer Capital Management, Inc. (“KCM”) serves as the Funds’ investment advisor and manager. KCM is a federally registered investment advisory firm that was founded in 1989. It currently manages approximately $4.7 billion in assets for mutual funds, corporations, pensions and individuals. In addition to serving as the Buffalo Funds’ investment advisor and manager, KCM serves as sub-advisor to the AFBA 5 Star Funds, a family of mutual funds sponsored by the Armed Forces Benefit Association with objectives and policies substantially similar to the Buffalo Funds.

KCM is a closely held corporation controlled by persons who are active in the management of the firm’s business. John C. Kornitzer is the majority stockholder of the firm and serves as the firm’s President and Chairman of KCM’s Board of Directors. Kent W. Gasaway, Robert Male, Susan McElwain and John C. Kornitzer each own more than 5% of the firm.

B-26

KCM serves as investment advisor and manager of each Fund pursuant to a Management Agreement that requires KCM to provide or pay the costs of all advisory and non-advisory services required to operate the Fund, in exchange for a single unitary management fee. KCM, provides business management and advisory services, and contracts with others to provide other needed services for the Funds. In this respect, KCM has entered into a Master Services Agreement with U.S. Bancorp Fund Services, LLC (“US Bancorp”) in Milwaukee Wisconsin, pursuant to which US Bancorp provides or obtains various operational services required by the Funds, pays various Fund expenses and acts as paying agent to compensate other Fund service providers. Some of the other Fund service providers are affiliates of US Bancorp.

As compensation for its services, each Fund (other than the Buffalo Micro Cap Fund) pays KCM a fee at the annual rate of one percent (1.00%) of each Fund’s average daily net assets. The Buffalo Micro Cap Fund pays KCM a fee at the annual rate of one and one forty-fifth of a percent (1.45%) of the Fund’s average daily net assets. Until May 1, 2003, KCM paid Jones & Babson, Inc. a fee of 50/100 of 1% (0.50%) of each Fund’s average daily net assets out of the fees KCM received from the Funds. This fee was computed daily. As of May 1, 2003, KCM pays US Bancorp a fee of 45/100 of 1% (0.45%) of each Fund’s average daily net assets out of the fees KCM receives from the Funds. Both KCM’s and US Bancorp’s fees are computed daily and the Funds pay KCM’s fees monthly.

For the past three fiscal years, the following management fees were paid to KCM:

Name of Fund	Fiscal Year Ended March 31, 2003	Fiscal Year Ended March 31, 2004	Fiscal Year Ended March 31, 2005
Buffalo Balanced	$186,201	$418,948	$
Buffalo High Yield	$969,862	$2,281,831	$
Buffalo Large Cap	$410,020	$488,406	$
Buffalo Micro Cap*			$
Buffalo Mid Cap	$380,358	$685,192	$
Buffalo Science & Technology	$151,822	$257,299	$
Buffalo Small Cap	$8,803,472	$12,756,648	$
Buffalo USA Global	$641,705	$745,365	$

* Buffalo Micro Cap Fund commenced operations on May 21, 2004.

PRINCIPAL UNDERWRITER.

Quasar Distributors, LLC (the “Distributor”), 615 E. Michigan Street, Milwaukee, Wisconsin 53202, a Delaware limited liability company, is the principal underwriter for the shares of the Funds. Quasar Distributors, LLC is a registered broker-dealer and member of the National Association of Securities Dealers. The Distributor is an affiliate of US Bancorp.

CODE OF ETHICS.

The Funds, their Advisor and Distributor have each adopted a code of ethics, as required by federal securities laws. Under each code of ethics, persons who are designated as access persons may engage in personal securities transactions, including transactions involving securities that may be purchased or sold by a Fund, subject to certain general restrictions and procedures. The codes of ethics are on file with the SEC.

CUSTODIAN.

U.S. Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is the Custodian of each Fund’s investments. The Custodian acts as each Fund’s depository, safekeeps its portfolio securities, collects all income and other payments with respect thereto, disburses funds at the Fund’s request and maintains records in connection with its duties.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

The Funds’ financial statements are audited by an independent registered public accounting firm approved by the Directors each year, and in years in which an annual meeting is held the Directors may submit their selection of an independent registered public accounting firm to the shareholders for ratification. Ernst & Young LLP, One Kansas City Place, 1200 Main Street, Suite 2000, Kansas City, Missouri 64105, is the Funds’ current independent registered public accounting firm.

B-27

ADMINISTRATOR.

KCM has retained U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, WI 53202, to provide various administrative and accounting services necessary for the operations of the Funds. Services provided by the Administrator include: facilitating general Fund management; monitoring Fund compliance with federal and state regulations; supervising the maintenance of each Fund’s general ledger, the preparation of each Fund’s financial statements, the determination of the net asset value of each Fund’s assets and the declaration and payment of dividends and other distributions to shareholders; and preparing specified financial, tax and other reports.

TRANSFER AGENT.

KCM has retained U.S. Bancorp Fund Services, LLC, P.O. Box 701, Milwaukee, WI 53201-0701, to serve as the Transfer Agent for each Fund. The Transfer Agent performs shareholder service functions such as maintaining the records of each shareholder’s account, answering shareholders’ inquiries concerning their accounts, processing purchase and redemptions of each Fund’s shares, acting as dividend and distribution disbursing agent and performing other accounting and shareholder service functions.

Certain officers and Directors of the Buffalo Funds are also officers or Directors of KCM or US Bancorp.

PORTFOLIO MANAGERS OF THE FUNDS

Buffalo Balanced Fund

John Kornitzer. Mr. Kornitzer is the president and chief investment officer of KCM, and has over 35 years of investment experience. He served as investment manager at several Fortune 500 companies prior to founding KCM in 1989. Mr. Kornitzer received his degree in Business Administration from St. Francis College in Pennsylvania. Mr. Kornitzer is the lead portfolio manager of the Buffalo Balanced Fund.

Other Accounts Managed by Portfolio Managers as of March 31, 2005

	Other Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
Portfolio Manager	Number	Total Assets	Number	Total Assets	Number	Total Assets
John Kornitzer	1	$60.8 million	5	$481.8 million	1,005	$783.4 million

Ownership of Securities in the Fund by Portfolio Managers as of March 31, 2005

Portfolio Manager	Dollar Range in Portfolio
John Kornitzer	Over $1,000,000

Buffalo High Yield Fund

Kent Gasaway, CFA, Portfolio Manager. Mr. Gasaway joined KCM in 1991 and has more than 22 years of research and management experience. Previously, Mr. Gasaway spent 10 years as an investment professional with Waddell & Reed Mutual Funds Group. He holds a B.S. in Business Administration from Kansas State University. Mr. Gasaway serves as lead portfolio manager of the Buffalo High Yield Fund. He also serves as co-portfolio manager of the Buffalo Large Cap, Buffalo Micro Cap, Buffalo Mid Cap, Buffalo Small Cap, Buffalo Science & Technology and Buffalo USA Global Funds.

B-28

Other Accounts Managed by Portfolio Managers as of March 31, 2005

	Other Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
Portfolio Manager	Number	Total Assets	Number	Total Assets	Number	Total Assets
Kent Gasaway	13	$2.5 billion	9	$490 million	59	$123.7 million

Ownership of Securities in the Fund by Portfolio Managers as of March 31, 2005

Portfolio Manager	Dollar Range in Portfolio
Kent Gasaway	$100,001 - $500,000

Buffalo Small Cap Fund

Robert Male, CFA, Portfolio Manager. Mr. Male joined KCM in 1997 and has more than 16 years of investment research experience. Prior to joining KCM, he was a senior equity securities analyst with the USAA Investment Management Co. mutual fund group in San Antonio, Texas. He holds a B.S. in Business Administration from the University of Kansas and an M.B.A. from Southern Methodist University. Mr. Male serves as co-portfolio manager of the Buffalo Large Cap, Buffalo Micro Cap, Buffalo Mid Cap, Buffalo Small Cap, Buffalo Science & Technology and Buffalo USA Global Funds.

Grant P. Sarris, CFA, Portfolio Manager. Mr. Sarris joined KCM in 2003 and has more than 13 years of investment research experience. He holds a B.A. from the University of Wisconsin and an MBA from the University of Minnesota. Prior to joining KCM, he was with Waddell & Reed in Overland Park, Kansas for 12 years. He served as both a Senior Vice President and as a portfolio manager from 2002-2003 and portfolio manager from 1997-2002. Mr. Sarris serves as co-portfolio manager of the Buffalo Large Cap, Buffalo Micro Cap, Buffalo Mid Cap, Buffalo Small Cap, Buffalo Science & Technology and Buffalo USA Global Funds.

Role/Relationship to others in Group: Equal role as manager and research analyst.

Other Accounts Managed by Portfolio Managers as of March 31, 2005

	Other Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
Portfolio Manager	Number	Total Assets	Number	Total Assets	Number	Total Assets
Kent Gasaway	13	$982 million	9	$490 million	59	$123.7 million
Robert Male	10	$630 million	9	$490 million	56	$114.8 million
Grant Sarris	10	$630 million	9	$490 million	56	$114.8 million

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Ownership of Securities in the Fund by Portfolio Managers as of March 31, 2005

Portfolio Manager	Dollar Range in Portfolio
Kent Gasaway	$100,001 - $500,000
Robert Male	$100,001 - $500,000
Grant Sarris	$100,001 - $500,000

Buffalo Mid Cap Fund

Role/Relationship to others in Group: Equal role as manager and research analyst.

Other Accounts Managed by Portfolio Managers as of March 31, 2005

	Other Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
Portfolio Manager	Number	Total Assets	Number	Total Assets	Number	Total Assets
Kent Gasaway	13	$2.6 billion	9	$490 million	59	$123.7 million
Robert Male	10	$2.3 billion	9	$490 million	56	$114.8 million
Grant Sarris	10	$2.3 billion	9	$490 million	56	$114.8 million

Ownership of Securities in the Fund by Portfolio Managers as of March 31, 2005

Portfolio Manager	Dollar Range in Portfolio
Kent Gasaway	$100,001 - $500,000
Robert Male	$100,001 - $500,000
Grant Sarris	$100,001 - $500,000

B-30

Buffalo Micro Cap Fund

Jonathan Angrist, Portfolio Manager. Mr. Angrist joined KCM in 2004 and has more than 11 years of investment management and consulting experience. Previously, Mr. Angrist spent 6 years as a private equity investment professional at the leveraged buyout firm Harvest Partners, Inc., serving most recently as a Principal. He holds a B.S. and an MBA from Tulane University. Mr. Angrist serves as co-portfolio manager of the Buffalo Micro Cap Fund.

Role/Relationship to others in Group: Equal role as manager and research analyst.

Other Accounts Managed by Portfolio Managers as of March 31, 2005

	Other Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
Portfolio Manager	Number	Total Assets	Number	Total Assets	Number	Total Assets
Kent Gasaway	13	$2.8 billion	9	$490 million	59	$123.7 million
Robert Male	10	$2.4 billion	9	$490 million	56	$114.8 million
Grant Sarris	10	$2.4 billion	9	$490 million	56	$114.8 million
Jonathan Angrist	0	N/A	0	N/A	0	N/A

Ownership of Securities in the Fund by Portfolio Managers as of March 31, 2005

Portfolio Manager	Dollar Range in Portfolio
Kent Gasaway	$100,001 - $500,000
Robert Male	$50,001 - $100,000
Grant Sarris	$100,001 - $500,000
Jonathan Angrist	$50,001 - $100,000

B-31

Buffalo Large Cap Fund

William Kornitzer, CFA, Portfolio Manager. Mr. Kornitzer worked for KCM as a research analyst from 1997-2000 and recently rejoined the firm in 2004 as a co-portfolio manager of the Buffalo Large Cap and Buffalo USA Global Funds. He was previously an executive director and portfolio manager at USAA Investment Management Company from 2000-2004. Kornitzer received his MBA from Drexel University and his B.S. in Finance from Virginia Tech. Mr. Kornitzer has over 13 years of investment experience.

Role/Relationship to others in Group: Equal role as manager and research analyst.

Other Accounts Managed by Portfolio Managers as of March 31, 2005

	Other Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
Portfolio Manager	Number	Total Assets	Number	Total Assets	Number	Total Assets
Kent Gasaway	13	$2.7 billion	9	$490 million	59	$123.7 million
Robert Male	10	$2.4 billion	9	$490 million	56	$114.8 million
Grant Sarris	10	$2.4 billion	9	$490 million	56	$114.8 million
William Kornitzer	3	$138 million	3	$146.4 million	1	$600 thousand

Ownership of Securities in the Fund by Portfolio Managers as of March 31, 2005

Portfolio Manager	Dollar Range in Portfolio
Kent Gasaway	$100,001 - $500,000
Robert Male	$10,001 - $50,000
Grant Sarris	$100,001 - $500,000
William Kornitzer	$1 - $10,000

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Buffalo USA Global Fund

Role/Relationship to others in Group: Equal role as manager and research analyst.

Other Accounts Managed by Portfolio Managers as of March 31, 2005

	Other Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
Portfolio Manager	Number	Total Assets	Number	Total Assets	Number	Total Assets
Kent Gasaway	13	$2.7 billion	9	$490 million	59	$123.7 million
Robert Male	10	$2.4 billion	9	$490 million	56	$114.8 million
Grant Sarris	10	$2.4 billion	9	$490 million	56	$114.8 million
William Kornitzer	3	$120 million	3	$146.4 million	1	$600 thousand

Ownership of Securities in the Fund by Portfolio Managers as of March 31, 2005

Portfolio Manager	Dollar Range in Portfolio
Kent Gasaway	$100,001 - $500,000
Robert Male	$10,001 - $50,000
Grant Sarris	$50,001 - $100,000
William Kornitzer	$1 - $10,000

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Buffalo Science and Technology Fund

Elizabeth Jones, MD, CFA, Portfolio Manager and Research Analyst. Ms. Jones joined KCM in 2003. She was previously a research analyst with Bank of America Capital Management from 2002-2003. She pursued her M.B.A. from Arizona State University from 2000-2002. She was a practicing M.D. for over eight years from 1992-2000. Ms. Jones received a B.S. from Georgetown University, an M.D. from Vanderbilt University, and an M.B.A. from Arizona State University. Ms. Jones serves as co-portfolio manager of the Buffalo Science & Technology Fund. She has three years of investment experience and 11 years of healthcare industry experience.

Dave Carlsen, CFA, Portfolio Manager and Research Analyst. Mr. Carlsen joined KCM in 2004. Mr. Carlsen was formerly a senior equity research analyst for technology at Strong Capital Management, Inc. in Milwaukee from 2000-2004, and also worked for Northern Capital Management Inc. from 1992-2000. Mr. Carlsen received a B.S. in finance and investments from the University of Wisconsin. Mr. Carlsen serves as co-portfolio manager of the Buffalo Science & Technology Fund and has over 13 years of investment experience.

Clay Brethour, CFA, Portfolio Manager and Research Analyst. Mr. Brethour joined KCM in 2000. He previously was an equity research analyst with Security Management Group from 1999-2000 and a research analyst with Dain Rauscher Wessels from 1992-1999. Mr. Brethour holds a B.S. in Business-Finance from Kansas State University. Mr. Brethour serves as co-portfolio manager of the Buffalo Science & Technology Fund and has over 13 years of investment experience.

Role/Relationship to others in Group: Equal role as manager and research analyst.

Other Accounts Managed by Portfolio Managers as of March 31, 2005

	Other Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
Portfolio Manager	Number	Total Assets	Number	Total Assets	Number	Total Assets
Robert Male	10	$2.4 billion	9	$490 million	56	$114.8 million
Grant Sarris	10	$2.4 billion	9	$490 million	56	$114.8 million
Elizabeth Jones	1	$5.6 million	2	$81.1 million	0	N/A
Dave Carlsen	1	$5.6 million	2	$81.1 million	0	N/A
Clay Brethour	1	$5.6 million	2	$81.1 million	0	N/A

B-34

Ownership of Securities in the Fund by Portfolio Managers as of March 31, 2005

Portfolio Manager	Dollar Range in Portfolio
Robert Male	$10,001 - $50,000
Grant Sarris	$50,001 - $100,000
Elizabeth Jones	$10,001 - $50,000
Dave Carlsen	None
Clay Brethour	$10,001 - $50,000

Material Conflicts Arising from Other Accounts Managed by Portfolio Managers

When an investment is appropriate or suitable for more than one fund or account, the following considerations apply:

·	The investment opportunity is allocated among mutual funds and individual client accounts on a pro rata basis according to their asset size.

·	An investment opportunity will generally not be placed in a fund or account if not in round lot shares of at least 100.

·	The investment opportunity will be spread over KCM’s accounts and Funds base to the fullest extent possible, within standards of appropriateness and suitability.

·	Initial public offerings receive the same considerations as any other investment opportunity, subject to certain investment limitations of some Funds and client accounts.

·	Investment opportunities limited in amount are not allocated to KCM proprietary accounts, employees or affiliated persons’ accounts.

·	KCM may not allocate any initial public offerings to any accounts in which a restricted person has a beneficial interest, subject to certain exemptions.

Compensation of Portfolio Managers

Compensation is salary plus bonus tied to short and long-term performance as well as other factors. The compensation structure is a modest base salary with a majority of compensation for all partners and investment staff coming in the form of bonus. Bonus is based on individual contributions and performance of the client and fund base and overall firm.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF THE FUNDS

Control persons are persons deemed to control a Fund because they own beneficially over 25% of the Fund’s outstanding equity securities. Principal holders are persons that own beneficially 5% or more of a Fund’s outstanding equity securities. As of June 30, 2005, the following shareholders were considered to be either a control person or principal shareholder of the Funds:

Name and Address	Fund	No. Shares	Percentage

Charles Schwab & Co. Inc.	Buffalo Balanced Fund, Inc.
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122

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National Financial Services Corp.		Buffalo Balanced Fund, Inc.
One World Financial Center
200 Liberty Street
MF Dept 5th Floor
New York, NY 10281-1003

Great Plains Trust Company*		Buffalo Balanced Fund, Inc.
House Account - Reinvest/Cap Gains Only
7700 Shawnee Mission Parkway, Suite 101
Overland Park, KS 66202-3057

Charles Schwab & Co. Inc.		Buffalo High Yield Fund, Inc.
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp.		Buffalo High Yield Fund, Inc.
One World Financial Center
200 Liberty Street
MF Dept 5th Floor
New York, NY 10281-1003

Charles Schwab & Co. Inc.		Buffalo Large Cap Fund, Inc.
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp.		Buffalo Large Cap Fund, Inc.
One World Financial Center
200 Liberty Street
MF Dept 5th Floor
New York, NY 10281-1003

Great Plains Trust Company*		Buffalo Large Cap Fund, Inc.
House Account - Reinvest
7700 Shawnee Mission Parkway, Suite 101
Overland Park, KS 66202-3057

Charles Schwab & Co. Inc.		Buffalo Mid Cap Fund
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp.		Buffalo Mid Cap Fund
One World Financial Center
200 Liberty Street
MF Dept 5th Floor
New York, NY 10281-1003

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National Financial Services Corp.		Buffalo Science & Technology Fund
One World Financial Center
200 Liberty Street
MF Dept 5th Floor
New York, NY 10281-1003

Charles Schwab & Co. Inc.		Buffalo Science & Technology Fund
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122

Great Plains Trust Company*		Buffalo Science & Technology Fund
House Account - Reinvest
7700 Shawnee Mission Parkway, Suite 101
Overland Park, KS 66202-3057

Charles Schwab & Co. Inc.		Buffalo Small Cap Fund, Inc.
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp.		Buffalo Small Cap Fund, Inc.
One World Financial Center
200 Liberty Street
MF Dept 5th Floor
New York, NY 10281-1003

Charles Schwab & Co. Inc.		Buffalo USA Global Fund, Inc.
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122

Great Plains Trust Company*		Buffalo USA Global Fund, Inc.
House Account - Reinvest
7700 Shawnee Mission Parkway, Suite 101
Overland Park, KS 66202-3057

* Mr. Kornitzer, President and Chairman of the Advisor, beneficially owns a controlling interest in Great Plains Trust Company, and therefore is considered a principal shareholder in several of the Funds.

MANAGEMENT OWNERSHIP OF THE FUNDS

As of June 30, 2005, officers and Directors owned ____________ shares of common stock of the Buffalo Balanced Fund (____%), ___________ shares of common stock of the Buffalo High Yield Fund (_____%), ____________ shares of common stock of the Buffalo Large Cap Fund (____%), ____________ shares of common stock of the Buffalo Mid Cap Fund (____%), ______________ shares of common stock of the Buffalo Science & Technology Fund (_____%), ____________ shares of common stock of the Buffalo Small Cap Fund (_____%), ____________ shares of common stock of the Buffalo USA Global Fund (_____%) and ___________ shares of common stock of the Buffalo Micro Cap Fund (_____%).

In addition, as of December 31, 2004, neither the Directors who are not “interested” persons of the Funds, as that term is defined in the 1940 Act, nor members of their immediate family, own securities beneficially or of record in the Advisor, the Distributor or any affiliate of the Advisor or the Distributor. Accordingly, as of December 31, 2004, neither the Directors who are not “interested” persons of the Funds nor members of their immediate family, have direct or indirect interest, the value of which exceeds $60,000, in the Advisor, the Distributor or any of their affiliates. In addition, as of December 31, 2004, neither the Directors who are not “interested” persons of the Funds nor members of their immediate family have conducted any transactions (or series of transactions) in which the amount involved exceeds $60,000 and to which the Advisor, the Distributor or their affiliates.

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DISTRIBUTIONS AND TAXES.

Distributions of Net Investment Income. A Fund receives income generally in the form of dividends and interest on its investments. This income, less expenses incurred in the operation of a Fund, constitutes the Fund's net investment income from which dividends may be paid to you. If you are a taxable investor, any income dividends (other than qualified dividends) the Fund pays are taxable to you at ordinary income tax rates. A portion of the income dividends paid to you may be qualified dividends eligible to be taxed at reduced rates provided certain holding period requirements are met.

Distributions of Capital Gains. A Fund may realize capital gains and losses on the sale of its portfolio securities. Distributions from net short-term capital gains are taxable to you as ordinary income. Distributions from net long-term capital gains are taxable to you as long-term capital gains, regardless of how long you have owned your shares in a Fund. Any net capital gains realized by a Fund generally are distributed once each year in December (semi-annually, usually in June and December by each of the Buffalo High Yield, Buffalo Large Cap, Buffalo Science & Technology and Buffalo USA Global Funds), and may be distributed more frequently, if necessary, to reduce or eliminate excise or income taxes on the Fund.

Investment in Foreign Securities. A Fund (other than the Buffalo USA Global Fund) may be subject to foreign withholding taxes on dividend income from ADRs. This, in turn, could reduce such a Fund's income dividends paid to you.

Your use of foreign dividends, designated by a Fund as dividends from qualifying foreign corporations and subject to taxation at long-term capital gain rates, may reduce the otherwise available foreign tax credits on your federal income tax return. Shareholders in these circumstances should talk with their personal tax advisors about their foreign tax credits and the procedures that they should follow to claim these credits on their personal income tax returns.

Information on the Tax Character of Distributions. The Funds will inform you of the amount of your income dividends and capital gain distributions at the time they are paid, and will advise you of their tax status for federal income tax purposes shortly after the close of each calendar year. The amount of income dividends designated by a Fund, consisting of qualified dividend income (which is relevant to U.S. investors) and interest-related and short-term capital gain dividends (which are relevant to non-U.S. investors) may exceed the total amount of income dividends paid. These designations will not result in more income being reported to you, but rather will allow the Fund to make its designations in a manner that is more tax efficient to both U.S. and non-U.S. investors. If you have not owned your Fund shares for a full year, the Fund may designate and distribute to you, as ordinary income, qualified dividends or capital gains, a percentage of income that may not be equal to the actual amount of each type of income earned during the period of your investment in the Fund. Distributions declared in December but paid in January are taxable to you as if paid in December.

Election to be Taxed as a Regulated Investment Company. Each Fund has elected to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code (“Code”). It has qualified as a regulated investment company for its most recent fiscal year, and intends to continue to qualify during the current fiscal year. As a regulated investment company, a Fund generally pays no federal income tax on the income and gains it distributes to you. The board reserves the right not to maintain the qualification of a Fund as a regulated investment company if it determines this course of action to be beneficial to shareholders. In that case, a Fund would be subject to federal, and possibly state, corporate taxes on its taxable income and gains, and distributions to you would be taxed as dividend income to the extent of the Fund’s earnings and profits.

B-38

Excise Tax Distribution Requirements. To avoid federal excise taxes, the Code requires a Fund to distribute to you by December 31 of each year, at a minimum, the following amounts:

· 98% of its taxable ordinary income earned during the calendar year;

· 98% of its capital gain net income earned during the twelve month period ending October 31; and

· 100% of any undistributed amounts of these categories of income or gain from the prior year.

Each Fund intends to declare and pay these distributions in December (or to pay them in January, in which case you must treat them as received in December), but can give no assurances that its distributions will be sufficient to eliminate all taxes.

Sales of Fund Shares. Sales and exchanges of Fund shares are taxable transactions for federal and state income tax purposes. If you sell your Fund shares, or exchange them for shares of a different Buffalo Fund, the IRS requires you to report any gain or loss on your sale or exchange. If you owned your shares as a capital asset, any gain or loss that you realize generally is a capital gain or loss, and is long-term or short-term, depending on how long you owned your shares.

Sales at a loss within six months of purchase. Any loss incurred on the sale or exchange of Fund shares owned for six months or less is treated as a long-term capital loss to the extent of any long-term capital gains distributed to you by the Fund on those shares.

Wash sales. All or a portion of any loss that you realize on the sale of your Fund shares is disallowed to the extent that you buy other shares in the Fund within 30 days before or after your sale. Any loss disallowed under these rules is added to your tax basis in the new shares.

U.S. Government Securities. The income earned on certain U.S. government securities is exempt from state and local personal income taxes if earned directly by you. States also grant tax-free status to mutual fund dividends paid to you from interest earned on these securities, subject in some states to minimum investment or reporting requirements that must be met by a fund. The income on Fund investments in certain securities, such as repurchase agreements, commercial paper and federal agency-backed obligations (e.g., Ginnie Mae or Fannie Mae securities), generally does not qualify for tax-free treatment. The rules on exclusion of this income are different for corporations.

Qualified Dividend Income for Individuals. For individual shareholders, a portion of the dividends paid by a Fund may be qualified dividends eligible for taxation at long-term capital gain rates. This reduced rate generally is available for dividends paid by a Fund out of dividends earned on the Fund’s investment in stocks of domestic corporations and qualified foreign corporations.

Both a Fund and the investor must meet certain holding period requirements to qualify Fund dividends for this treatment. Specifically, a Fund must hold the stock for at least 61 days during the 121-day period beginning 60 days before the stock becomes ex-dividend. Similarly, investors must hold their Fund shares for at least 61 days during the 121-day period beginning 60 days before the Fund distribution goes ex-dividend. The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of stock is not entitled to receive the dividend payment. When counting the number of days you held your Fund shares, include the day you sold your shares but not the day you acquired these shares.

If 95% or more of the Fund’s income is from qualified sources, it will be allowed to designate 100% of the Fund’s distributions as qualified dividend income. The amount of a Fund’s ordinary dividend distribution that is eligible for this favored tax treatment will be reported by the Fund in its year-end tax notices to shareholders.

Buffalo High Yield Fund. Because the Buffalo High Yield Fund’s income is derived primarily from interest rather than dividends, none or only a small percentage of its distributions are expected to be qualified dividend income eligible for taxation by individuals at long-term capital gain rates.

B-39

Dividends-received Deduction for Corporations. For corporate shareholders, a portion of the dividends paid by a Fund may qualify for the dividends-received deduction. This deduction generally is available to corporations for dividends paid by a fund out of income earned on its investments in stock of domestic corporations. All dividends (including the deducted portion) must be included in your alternative minimum taxable income calculation.

Buffalo High Yield Fund. Because the income of the Buffalo High Yield Fund is derived primarily from interest rather than dividends, generally none or only a small percentage of its income dividends will be eligible for the corporate dividends-received deduction.

Investment in Complex Securities. The Funds may invest in complex securities that could be subject to numerous special and complex tax rules. These rules could accelerate the recognition of income by a Fund (possibly causing the Fund to sell securities to raise the cash for necessary distributions) and/or defer a Fund's ability to recognize a loss. These rules could also affect whether gain or loss recognized by a Fund is treated as ordinary or capital, or as interest or dividend income. These rules could, therefore, affect the amount, timing or character of the income distributed to you by a Fund.

Non-U.S. Investors. Non-U.S. Investors may be subject to U.S. withholding and estate tax and are subject to special U.S. tax certification requirements. Foreign persons should consult their tax advisors about the applicability of U.S. tax withholding and the use of the appropriate forms to certify their status.

The United Sates imposes a flat 30% withholding tax (or lower treaty rate) on U.S. source dividends. In general, capital gain dividends paid by a Fund from either long-term or short-term capital gains (other than gain realized on disposition of U.S. real property interests) are not subject to U.S. withholding tax unless you are a nonresident alien individual present in the United States for a period or periods aggregating 183 days or more during the taxable year.

Also, interest-related dividends paid by a Fund from qualified net interest income generally are not subject to U.S. withholding tax. “Qualified interest income” or “QII” includes, in general, U.S. source (1) bank deposit interest, (2) short-term original discount and (3) interest (including original issue discount, market discount, or acquisition discount) on an obligation which is in registered form, unless it is earned on an obligation issued by a corporation or partnership in which the Fund is a 10-percent shareholder or is contingent interest, and (4) any interest-related dividend from another regulated investment company. The amount of ordinary dividends that are designated by a Fund as an interest-related dividend (other than dividends paid following the close of the Fund’s fiscal year) must be based on an estimate of the Fund’s qualified net interest income for its entire fiscal year, which can only be determined at fiscal year end. As a consequence, the Fund may over or under withhold U.S. tax on the income dividends paid to you. To the extent that the Fund pays an additional income dividend later in the calendar year, it may be able to adjust for any such over or under withholding. But there is no guarantee that the Fund will be able to eliminate any over withholding. In addition, the Funds reserve the right not to designate interest-related dividends as such and to reduce their withholding on these dividends where the amount designated would be de minimis on a per share basis.

Ordinary dividends paid by a Fund to non-U.S. investors on the income earned on portfolio investments in (i) the stock of domestic and foreign corporations, and (ii) the debt of foreign issuers continue to be subject to U.S. withholding tax. If you hold your Fund shares in connection with a U.S. trade or business, your income and gains will be considered effectively connected income and taxed in the U.S. on a net basis, in which case you may be required to file a nonresident U.S. income tax return. The exemption from withholding for short-term capital gain dividends and interest-related dividends paid by a Fund is effective for dividends paid with respect to taxable years of the Fund beginning after December 31, 2004 and before January 1, 2008.

A partial exemption from U.S estate tax may apply to stock in a Fund held by the estate of a nonresident decedent. The amount treated as exempt is based upon the proportion of the assets held by the Fund at the end of the quarter immediately preceding the decedent's death that are debt obligations, deposits, or other property that would generally be treated as situated outside the United States if held directly by the estate. This provision applies to decedents dying after December 31, 2004 and before January 1, 2008.

B-40

Special U.S. tax certification requirements apply to non-U.S. shareholders both to avoid U.S. back up withholding imposed at a rate of 28% and to obtain the benefits of any treaty between the United States and the shareholder’s country of residence. In general, a non-U.S. shareholder must provide a Form W-8 BEN (or other applicable Form W-8) to establish that you are not a U.S. person, to claim that you are the beneficial owner of the income and, if applicable, to claim a reduced rate of, or exemption from, withholding as a resident of a country with which the United States has an income tax treaty. A Form W-8BEN provided without a U.S. taxpayer identification number will remain in effect for a period beginning on the date signed and ending on the last day of the third succeeding calendar year unless an earlier change of circumstances makes the information on the form incorrect.

You should consult your tax advisor about the federal, state, local or foreign tax consequences of an investment in the Fund.

FINANCIAL STATEMENTS.

The audited financial statements of each of the Buffalo Funds which are contained in the March 31, 2005, Annual Report to Shareholders, are incorporated herein by reference. Unaudited reports to shareholders will be published at least semi-annually.

GENERAL INFORMATION AND HISTORY.

Each of the Buffalo Funds (except for the Buffalo Micro Cap, Buffalo Mid Cap and Buffalo Science & Technology Funds) are incorporated in the State of Maryland and are registered as an investment company under the 1940 Act. Buffalo Balanced Fund, Inc., Buffalo High Yield Fund, Inc., Buffalo Large Cap Fund, Inc., Buffalo USA Global Fund, Inc. were each incorporated in 1994. Buffalo Small Cap Fund, Inc. was incorporated in 1997. Buffalo Science & Technology, Buffalo Micro Cap and Buffalo Mid Cap Funds are each a series of Buffalo Funds. Buffalo Funds was organized as a Delaware statutory trust (a form of entity formerly known as a business trust) (“Statutory Trust”) on February 14, 2001. Buffalo Large Cap Fund, Inc. changed its name from Buffalo Equity Fund, Inc. effective February 28, 2002.

All shares issued by each Buffalo Fund incorporated in Maryland are of the same class with like rights and privileges as other shares issued by the same Fund. Each full and fractional share, issued and outstanding, has (1) equal voting rights with respect to matters that affect that particular Fund and (2) equal dividend, distribution and redemption rights to the assets of that Fund. Shares when issued are fully paid and non-assessable. Any of these Buffalo Funds may create other series of stock. Shareholders do not have pre-emptive or conversion rights.

With regard to the Buffalo Micro Cap, Buffalo Mid Cap and the Buffalo Science & Technology Funds, an unlimited number of shares of beneficial interest in the Statutory Trust were issued for each of these Funds. All shares of each of these Funds have the same rights and privileges as other shares of the same Fund. Each full and fractional share issued and outstanding has (1) equal voting rights with respect to matters that affect that Fund and (2) equal dividend, distribution and redemption rights to the assets of that Fund. Shares when issued are fully paid and non-assessable. The Statutory Trust Board may create other series of the Statutory Trust and divide any series into separate classes. Shareholders do not have pre-emptive or conversion rights.

Non-cumulative voting. Shares of the Funds have non-cumulative voting rights, which means that the holders of 50% of the shares voting for the election of Directors can elect 100% of the Directors, if they choose to do so, and in such event, the holders of the remaining less than 50% of the shares voting will not be able to elect any Directors.

Shareholder meetings. The Funds will not hold annual meetings except as required by the 1940 Act and other applicable laws. Under Maryland law, a special meeting of shareholders of the Funds incorporated in Maryland must be held if the Funds incorporated in Maryland receive the written request for a meeting from the shareholders entitled to cast at least 25% of all the votes entitled to be cast at the meeting.

B-41

The Funds have undertaken that their Directors will call a meeting of shareholders if such a meeting is requested in writing by the holders of not less than 10% of the outstanding shares of a Fund.

PROXY VOTING POLICIES AND PROCEDURES.

The Funds delegate all proxy voting decisions regarding the Funds’ securities to Kornitzer Capital Management, Inc. (“KCM”), the Funds’ investment advisor. As a result, the Advisor’s proxy voting policies and procedures govern how the Funds’ proxies are voted.

KCM’s authority to vote proxies or act with respect to other shareholder actions is established through the delegation of discretionary authority under its investment advisory contract. KCM will vote all proxies and act on all other actions in a timely manner as part of its full discretionary authority over Fund assets in accordance with the Advisor’s Policies and Procedures. Corporate actions may include, for example and without limitation, tender offers or exchanges, bankruptcy proceedings, and class actions.

When voting proxies or acting with respect to corporate actions for the Funds, KCM’s utmost concern is that all decisions be made solely in the best interest of the Funds. KCM will act in a prudent and diligent manner intended to enhance the economic value of the assets of the Funds.

A proxy voting committee makes all proxy decisions and is ultimately responsible for ensuring that all proxies received by KCM are voted in a timely manner and in a manner consistent with KCM’s determination of the Funds’ best interests.

Where a proxy proposal raises a material conflict between KCM’s interests and the Funds’ interest, the Advisor will resolve such a conflict in the manner described below:

·	Vote in Accordance with the Guidelines. To the extent that KCM has little or no discretion to deviate from the Guidelines with respect to the proposal in question, the Advisor shall vote in accordance with such pre-determined voting policy.

Obtain Consent of Directors. To the extent that KCM has discretion to deviate from the Guidelines with respect to the proposal in question, the Advisor will disclose the conflict to the Funds’ Boards of Directors and obtain their consent to the proposed vote prior to voting the securities. The disclosure to the Boards will include sufficient detail regarding the matter to be voted on and the nature of KCM’s conflict that the Boards would be able to make an informed decision regarding the vote. If a Board does not respond to such a conflict disclosure request or denies the request, KCM will abstain from voting the securities held by that account.

KCM will generally vote against any management proposal that is not deemed to be in the shareholders’ best interests. Proposals in this category would include issues regarding the issuer’s Board entrenchment, anti-takeover measures, providing cumulative voting rights and election of directors who sit on more than five boards.

Proxies will normally be voted with management on routine proposals that do not change the structure, bylaws, or operations of the corporation to the detriment of the shareholders, such as election of auditors, date and place of annual meeting and reasonable Employee Stock Purchase Plans. Some proxy decisions may be made on a case-by-case basis.

A description of the Funds/Advisors’ proxy voting procedures is available without charge upon request, by calling 1-800-492-8332 and on the Securities and Exchange Commission’s website at http://www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by (1) calling the Funds at 1-800-492-8332 or (2) on the SEC website at http://www.sec.gov.

B-42

APPENDIX-RATINGS INFORMATION.

Bond Ratings.

S&P	MOODY’S	DESCRIPTIONS
AAA	Aaa	These are the highest ratings assigned by S&P and Moody's to a debt obligation. They indicate an extremely strong capacity to pay interest and repay principal.
AA	Aa	Debt rated in this category is considered to have a very strong capacity to pay interest and repay principal and differs from AAA/Aaa issues only in a small degree.
A	A	Debt rated A has a strong capacity to pay interest and repay principal, although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher-rated categories.
BBB	Baa	Debt rated BBB/Baa is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher-rated categories. Debt rated below BBB/Baa is regarded as having significant speculative characteristics.
BB	Ba	Debt rated BB/Ba has less near-term vulnerability to default than other speculative issues. But it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions that could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category also is used for debt subordinated to senior debt that is assigned an actual or implied BBB-/Baa3 rating.
B	B	Debt rated B has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB/Ba or BB-/Ba3 rating.
CCC	Caa	Debt rated CCC/Caa has a currently identifiable vulnerability to default and is dependent upon favorable business, financial and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The CCC/Caa rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B-/B3 rating.
CC	Ca	The rating CC/Ca typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC/Caa rating.
C	C	The rating C typically is applied to debt subordinated to senior debt, which is assigned an actual or implied CCC/Caa3 debt rating. The C rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments- are continued.
CI	N/A	The rating CI is reserved for income bonds on which no interest is being paid.
D	N/A	Debt rated D is in payment default. The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired unless S&P believes that such payments will be made during such grace period. The D rating also will be used upon the filing of bankruptcy petition if debt service payments are jeopardized.
To provide more detailed indications of credit quality, the Standard & Poor’s ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within these major rating categories. Similarly, Moody’s adds numerical modifiers (1,2,3) to designate relative standing within its major bond rating categories. Fitch Investors Service, Inc. also rates bonds and uses a ratings system that is substantially similar to that used by Standard & Poor’s. With regard to S&P’s ratings, bonds rated BB, B, CCC and CC are usually considered predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligations. BB indicates the lowest degree of speculation and CC the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, they are outweighed by large uncertainties or major risk exposures to adverse conditions.

B-43

Commercial Paper Ratings.

S&P	MOODY’S	DESCRIPTION
A-1	Prime-1 (P-1)	This rating indicates that the degree of safety regarding timely payments is strong. Standard & Poor’s rates those issues determined to possess extremely strong safety characteristics as A-1+.
A-2	Prime-2 (P-2)	Capacity for timely payment on commercial paper is satisfactory, but the relative degree of safety is not as high as for issues designated A-1. Earnings trends and coverage ratios, while sound will be more subject to variation. Capitalization characteristic while still appropriated, may be more affected by external conditions. Ample alternate liquidity is maintained.
A-3	Prime-3 (P-3)	Satisfactory capacity for timely repayment. Issues that carry this rating are somewhat more vulnerable to the adverse changes in circumstances than obligations carrying the higher designations.
B	N/A	Issues rated “B” are regarded as having only an adequate capacity for timely payment. Furthermore, such capacity may be damaged by changing condi-tions or short-term adversities.
C	N/A	This rating is assigned to short-term debt obligations with a doubtful capacity for payment.
D	N/A	This rating indicates that the issuer is either in default or is expected to be in default upon maturity.
Moody’s commercial paper rating is an opinion of the ability of an issuer to repay punctually promissory obligations not having an original maturity in excess of nine months. Moody’s only rating, prime, means that it believes that the commercial paper note will be redeemed as agreed. The criteria used by Moody’s for rating a commercial paper issuer under this graded system include, but are not limited to the following factors: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer’s industry or industries and an appraisal of speculative type risks which may be in-herent in certain areas; (3) evaluation of the issuer’s products in relation to competi-tion and customer acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and relationships which exist with the issuer; and (8) recognition by the management of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. S&P’s commercial paper rating is a current assessment of the likelihood of timely repayment of debt having an original maturity of no more than 270 days.

B-44

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933:	[X]

Pre-Effective Amendment No. ___	[ ]

Post-Effective Amendment No. 13	[X]

and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940:	[X]

Amendment No. 15	[X]

[ ]	immediately upon filing pursuant to paragraph (b).
[ ]	on pursuant to paragraph (b)
[X]	60 days after filing pursuant to paragraph (a)(1).
[ ]	on pursuant to paragraph (a)(1).
[ ]	75 days after filing pursuant to paragraph (a)(2).
[ ]	on pursuant to paragraph (a)(2) of Rule 485.

	1 Year	5 Years	10 Years
Buffalo Balanced Fund
Return Before Taxes
Return After Taxes on Distributions
Return After Taxes on Distributions and Sale of Fund Shares
S&P 500 Index¹
S&P 500 Index and Merrill Lynch U.S. Domestic Master Index Weighted Average²
Lipper Balanced Funds Index³

	1 Year	5 Years	Since Inception*
Buffalo High Yield Fund
Return Before Taxes
Return After Taxes on Distributions
Return After Taxes on Distributions and Sale of Fund Shares
Merrill Lynch High Yield Master Index¹
Lipper High Yield Bond Funds Index²

	1 Year	5 Years	Since Inception*
Buffalo Large Cap Fund
Return Before Taxes
Return After Taxes on Distributions
Return After Taxes on Distributions and Sale of Fund Shares
S&P 500 Index¹
Lipper Capital Appreciation Funds Index ²
Lipper Large-Cap Core Funds Index ³

	Page
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES	1

PRINCIPAL RISK FACTORS	4

PAST PERFORMANCE	6

FEES & EXPENSES	15

FEE EXAMPLES	17

PORTFOLIO HOLDINGS	17

MANAGEMENT AND INVESTMENT ADVISOR	17

FINANCIAL HIGHLIGHTS	20

HOW TO PURCHASE SHARES	28

HOW TO REDEEM SHARES	28

SHAREHOLDER SERVICES	29

HOW SHARE PRICE IS DETERMINED	29

DISTRIBUTIONS AND TAXES	30

ADDITIONAL POLICIES ABOUT TRANSACTIONS	31

PRIVACY POLICY	34

CONDUCTING BUSINESS WITH THE BUFFALO FUNDS	37

	Buffalo Balanced Fund	Buffalo High Yield Fund		Buffalo Large Cap Fund	Buffalo Micro Cap Fund
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases	None	None	None		None
Maximum Deferred Sales Charge (Load)	None	None	None		None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None	None	None		None
Redemption Fee*†	2.00%	2.00%	2.00%		2.00%
Exchange Fee	None	None	None		None

	Buffalo Mid Cap Fund	Buffalo Science & Technology Fund	Buffalo Small Cap Fund	Buffalo USA Global Fund
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases	None	None	None	None
Maximum Deferred Sales Charge (Load)	None	None	None	None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None	None	None	None
Redemption Fee*†	2.00%	2.00%	2.00%	2.00%
Exchange Fee	None	None	None	None
*A $15 fee is imposed for redemptions by wire. † If you redeem or exchange shares of the Buffalo High Yield Fund, Buffalo Micro Cap Fund or Buffalo Small Cap Fund within 180 days of purchase, you will be charged a 2.00% redemption fee. If you redeem or exchange shares of the Buffalo Balanced Fund, Buffalo Large Cap Fund, Buffalo Mid Cap Fund, Buffalo Science & Technology Fund or Buffalo USA Global Fund within 60 days of purchase, you will be charged a 2.00% redemption fee.

	1 Year	3 Years	5 Years	10 Years
Buffalo Balanced Fund
Buffalo High Yield Fund
Buffalo Large Cap Fund
Buffalo Micro Cap Fund
Buffalo Mid Cap Fund
Buffalo Science & Technology Fund
Buffalo Small Cap Fund
Buffalo USA Global Fund

Condensed data for a share of capital stock outstanding throughout the period.	Years Ended March 31,
	2005	2004	2003	2002^(a)	2001
Net asset value, beginning of year	$9.38	$7.27	$ 9.27	$ 8.97	$ 9.86

Income from investment operations:
Net investment income		0.29	0.20	0.33	0.35
Net gains (losses) on securities (both realized and unrealized)		2.12	(1.99)	0.23	(0.79)
Total from investment operations		2.41	(1.79)	0.56	(0.44)

Less distributions:
Dividends from net investment income		(0.30)	(0.21)	(0.26)	(0.45)
Distributions from capital gains		--	--	--	--
Total distributions		(0.30)	(0.21)	(0.26)	(0.45)

Net asset value, end of year		$ 9.38	$ 7.27	$ 9.27	$ 8.97

Total return		33.50%	(19.32%)	6.48%	(4.58%)

Ratios/Supplemental Data:
Net assets, end of year (in millions)		$ 77	$ 18	$ 23	$ 28
Ratio of expenses to average net assets		1.05%	1.10%	1.08%	1.06%
Ratio of net investment income to average net assets		3.47%	2.60%	2.71%	3.72%
Portfolio turnover rate		32%	45%	12%	68%

Condensed data for a share of capital stock outstanding throughout the period.	For The Period From May 21, 2004 (Inception) to March 31, 2005



Net asset value, beginning of period	$ 10.00

Income from investment operations:
Net investment loss
Net gains (losses) on securities (both realized and unrealized)
Total from investment operations

Less distributions:
Dividends from net investment income
Distributions from capital gains
Total distributions

Net asset value, end of period

Total return*

Ratios/Supplemental Data:
Net assets, end of period (in millions)
Ratio of expenses to average net assets**
Ratio of net investment (loss) to average net assets**
Portfolio turnover rate

Condensed data for a share of capital stock outstanding throughout the period.	Years Ended March 31,			For The Period From December 17, 2001 (Inception) to March 31,
	2005	2004	2003	2002

Net asset value, beginning of period	$12.43	$7.54	$10.12	$ 10.00

Income from investment operations:
Net investment loss		(0.04)	(0.04)	(0.01)
Net gains (losses) on securities (both realized and unrealized)		4.93	(2.54)	0.13
Total from investment operations		4.89	(2.58)	0.12

Less distributions:
Dividends from net investment income		--	--	--
Distributions from capital gains		--	--	--
Total distributions		--	--	--

Net asset value, end of period		$12.43	$7.54	$ 10.12

Total return*		64.85%	(25.49%)	1.20%

Ratios/Supplemental Data:
Net assets, end of period (in millions)		$ 112	$ 39	$ 32
Ratio of expenses to average net assets**		1.03%	1.10%	1.16%
Ratio of net investment loss to average net assets**		(0.48%)	(0.59%)	(0.71%)
Portfolio turnover rate		24%	8%	3%

Condensed data for a share of capital stock outstanding throughout the period.	Years Ended March 31,			For The Period From April 16, 2001 (Inception) to March 31,
	2005	2004	2003	2002


Net asset value, beginning of period	$11.04	$ 6.01	$ 10.18	$ 10.00

Income from investment operations:
Net investment loss		(0.04)	(0.05)	(0.05)
Net gains (losses) on securities (both realized and unrealized)		5.07	(4.12)	0.23
Total from investment operations		5.03	(4.17)	0.18

Less distributions:
Dividends from net investment income		--	--	--
Distributions from capital gains		--	--	--
Total distributions		--	--	--

Net asset value, end of period		$11.04	$ 6.01	$ 10.18

Total return*		83.69%	(40.96%)	1.80%

Ratios/Supplemental Data:
Net assets, end of period (in millions)		$ 35	$ 15	$ 19
Ratio of expenses to average net assets**		1.03%	1.23%	1.17%
Ratio of net investment (loss) to average net assets**		(0.55%)	(0.73%)	(0.77%)
Portfolio turnover rate		38%	26%	4%

BY PHONE OR INTERNET	HOW TO OPEN AN ACCOUNT	HOW TO ADD TO AN ACCOUNT	HOW TO SELL SHARES	HOW TO EXCHANGE SHARES
1-800-49-BUFFALO (1-800-492-8332) www.buffalofunds.com You must authorize each type of transaction on your account application or on the appropriate form. If you call, the Funds’ representative may request personal identification and tape-record the call.	If you already have a Buffalo Fund account, you may open an account in another Buffalo Fund ($1,000 minimum). The names and registrations on the accounts must be identical.	You may make additional investments ($100 minimum) by telephone/on-line. After the Funds receive and accept your request, the Funds will deduct from your checking account the cost of the shares. Availability of this service is subject to approval by the Funds and the participating banks.	You may withdraw any amount up to $25,000 by telephone/on-line, provided that you have registered for this service previously. The Funds will send money only to the address of record, via ACH or by wire.	You may exchange existing shares ($1,000 minimum exchange) for shares in another Buffalo Fund. The shares being exchanged must have been held in an open account for 15 days or more.
BY MAIL
All Purchases and Redemptions: Regular Mail Buffalo Funds c/o U.S. Bancorp Fund Services, LLC P.O. Box 701 Milwaukee, WI 53201-0701 Registered/Overnight Mail: Buffalo Funds c/o U.S. Bancorp Fund Services, LLC 615 East Michigan Street Milwaukee, WI 53202-5207	Complete and sign the application that accompanies this Prospectus. Your initial investment must meet the account minimum requirement. Make your check payable to Buffalo Funds. and be sure to indicate the name of the Fund in which you are investing.	Make your check ($100 minimum) payable to Buffalo Funds and mail it to the Funds. Always identify your account number or include the detachable investment stub (from your confirmation statement).	In a letter, include the genuine signature of each registered owner (exactly as registered), the name of each account owner, the account number and the number of shares or the dollar amount to be redeemed. The Funds will send money only to the address of record, via ACH or by wire.	In a letter, include the genuine signature of each registered owner, the account number, the number of shares or dollar amount to be exchanged ($100 minimum) and the name of the Buffalo Fund into which the money is being transferred.

BY WIRE
U.S. Bank, N.A. 777 E. Wisconsin Ave. Milwaukee, WI 53202 ABA#075000022 Credit: U.S. Bancorp Fund Services, LLC A/C#112-952-137 Further Credit: (Name of specific Buffalo Fund) (Shareholder name and account number)	First, contact the Funds by phone to make arrangements with a telephone representative to send in your completed application via facsimile. Within 24 hours of receipt of the faxed application, a telephone representative will provide you with an account number and wiring instructions. You may then contact your bank to wire funds according to the instructions you are given. Your initial purchase will be placed as of the date the funds are received provided the funds are received before the close of the market. If the funds are received after the close of the market, your shares will be purchased using the next business day’s closing NAV. Mail your original application to the Buffalo Funds.	Wire share purchases ($100 minimum) should include the names of each account owner, your account number and the name of the Fund in which you are purchasing shares. In order to obtain wiring instructions, and to ensure proper credit, please notify the Funds prior to sending a wire purchase order.	Redemption proceeds ($1,000 minimum) may be wired to your pre-identified bank account. A $15 fee is charged. If your written request is received before 4:00 P.M. (Eastern Time) the Funds will normally wire the money on the following business day. If the Funds receive your written request after 4:00 P.M. (Eastern Time), the Funds will normally wire funds on the second business day. Contact your bank about the time of receipt and availability.	Not applicable.
THROUGH AUTOMATIC TRANSACTION PLANS
You must authorize each type of automatic transaction on your account application or complete an authorization form, which you can obtain from the Funds by request. All registered owners must sign.	Not applicable.	Automatic Monthly Investment: You may authorize automatic monthly investments in a constant dollar amount ($100 minimum) from your checking account. The Funds will draft your checking account on the same day each month in the amount you authorize via ACH. In order to participate in the Automatic Monthly Investment Plan, your bank must be a member of the ACH system.	Systematic Redemption Plan: You may specify a dollar amount ($50 minimum) to be withdrawn monthly or quarterly or have your shares redeemed at a rate calculated to exhaust the account at the end of a specified period. You must own shares in an open account valued at $10,000 when you first authorize the systematic redemption plan. You may cancel or change your plan or redeem all your shares at any time. The Funds will continue withdrawals until your shares are gone or until the Fund or you cancel the plan.	Systematic Exchanges: You may authorize systematic exchanges from your account ($100 minimum to an existing Buffalo Account and $1,000 to a new Buffalo account) to another Buffalo Fund. Exchanges will be continued until all shares have been exchanged or until you terminate the service.

Advisors Series Trust	The Hennessy Funds, Inc.
Allied Asset Advisors Funds	The Hennessy Mutual Funds, Inc.
Alpine Equity Trust	Hotchkis and Wiley Funds
Alpine Series Trust	Intrepid Capital Management
Alpine Income Trust	Jacob Internet Fund Inc.
AIP Alternative Strategies Funds	The Jensen Portfolio, Inc.
Brandes Investment Trust	Julius Baer Funds
Brandywine Blue Funds, Inc.	Kensington Funds
Brazos Mutual Funds	Kirr Marbach Partners, Funds, Inc.
Bridges Fund	Light Revolution Fund
Buffalo Funds	LKCM Funds
Buffalo Balanced Fund, Inc.	Masters’ Select Funds
Buffalo High Yield Fund, Inc.	Matrix Advisors Value Fund, Inc.
Buffalo Large Cap Fund, Inc.	Monetta Fund, Inc.
Buffalo Small Cap Fund, Inc.	Monetta Trust
Buffalo U.S. Global Fund, Inc.	MP63 Fund
CCM Advisors Funds	MUTUALS.com
CCMA Select Investment Trust	NorCap Funds
Country Mutual Funds Trust	Optimum Q Funds
Cullen Funds Trust	Permanent Portfolio Funds
Everest Funds	Primecap Odyssey Funds
First American Funds, Inc.	Professionally Managed Portfolios
First American Investment Funds, Inc.	Prudent Bear Funds, Inc.
First American Strategy Funds, Inc.	Purisima Funds
FFTW Funds, Inc.	Rainier Funds
Fort Pitt Capital Funds	Summit Funds
Glenmede Fund, Inc.	TIFF Investment Program, Inc.
Guinness Atkinson Funds	Trust For Professional Managers
Harding, Loevner Funds, Inc.	Wexford Trust

Name and Principal Business Address	Position and Offices with Quasar Distributors, LLC	Positions and Offices with Registrant
James R. Schoenike	President, Board Member	None
Donna J. Berth	Treasurer	None
Joe Redwine	Board Member	None
Bob Kern	Board Member	None
Eric W. Falkeis	Board Member	None
Teresa Cowan	Assistant Secretary	None
The address of each of the foregoing is 615 East Michigan Street, Milwaukee, Wisconsin, 53202.






	Buffalo Funds

	Kent W. Gasaway*
	Kent W. Gasaway
	President/Treasurer/ Trustee

Signature	Title	Date

Kent W. Gasaway* Kent W. Gasaway	President, Treasurer and Trustee	May 20, 2005
/s/ Joseph C. Neuberger Joseph C. Neuberger	Chairman and Trustee	May 20, 2005
Gene M. Betts* Gene M. Betts	Trustee	May 20, 2005
Thomas S. Case* Thomas S. Case	Trustee	May 20, 2005
J. Gary Gradinger* J. Gary Gradinger	Trustee	May 20, 2005
Philip J. Kennedy* Philip J. Kennedy	Trustee	May 20, 2005

* By: /s/ Joseph C. Neuberger Joseph C. Neuberger
(Pursuant to Power of Attorney previously filed)

EXHIBIT INDEX

Power of Attorney for Buffalo Funds	EX-99.j.2.i
Power of Attorney for Buffalo Balanced Fund, Inc.	EX-99.j.2.ii
Power of Attorney for Buffalo Large Cap Fund, Inc.	EX-99.j.2.iii
Power of Attorney for Buffalo High Yield Fund, Inc.	EX-99.j.2.iv
Power of Attorney for Buffalo USA Global Fund, Inc.	EX-99.j.2.v
Power of Attorney for Buffalo Small Cap Fund, Inc.	EX-99.j.2.vi