ADDICUS ADVISORY, LLC

Addicus Advisory, LLC 333 West Franklin Street Tupelo, Mississippi 38804 Telephone: 1-877-294-8658 Facsimile: 1-888-398-3602 Website address: addicusadvisors.com March 31, 2025 FORM ADV PART 2A BROCHURE This Brochure provides information about the qualifications and business practices of Addicus Advisory, LLC. If you have any questions about the contents of this Brochure, contact us at 1-877-294- 8658. The information in this Brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Additional information about Addicus Advisory, LLC is available on the SEC's website at www.adviserinfo.sec.gov. Addicus Advisory, LLC is a registered investment adviser. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. 1  Item 2 Summary of Material Changes Form ADV Part 2 requires registered investment advisers to amend their brochure when information becomes materially inaccurate. If there are any material changes to an adviser's disclosure brochure, the adviser is required to notify you and provide you with a description of the material changes. Since our last annual updating amendment, dated March 29, 2024, there have been no material changes to our Form ADV: 2  Item 3 Table of Contents Item 1 Cover Page Item 2 Summary of Material Changes Item 3 Table of Contents Page 1 Page 2 Page 3 Item 4 Advisory Business Item 5 Fees and Compensation Item 6 Perf ormance-Based Fees and Side-By-Side Management Item 7 Types of Clients Item 8 Methods of Analysis, Investment Strategies and Risk of Loss Item 9 Disciplinary Inf ormation Page 4 Page 5 Page 9 Page 10 Page 10 Page 15 Item 10 Other Financial Industry Activities and Af f iliations Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Item 12 Brokerage Practices Item 13 Review of Accounts Item 14 Client Ref errals and Other Compensation Item 15 Custody Item 16 Investment Discretion Item 17 Voting Client Securities Item 18 Financial Inf ormation Item 19 Additional Inf ormation Page 15 Page 17 Page 18 Page 19 Page 20 Page 20 Page 21 Page 22 Page 22 Page 22 3  Item 4 Advisory Business Description of Firm Addicus Advisory, LLC is a registered investment adviser primarily based in Tupelo, Mississippi. We are organized as a limited liability company ("LLC") under the laws of the State of Mississippi. We have been providing investment advisory services since July 2016. We are owned by Addicus Holdings, LLC. Addicus Holdings, LLC is owned by indirectly by Stephen Miles and Andrew Adams The following paragraphs describe our services and fees. Refer to the description of each investment advisory service listed below for information on how we tailor our advisory services to your individual needs. As used in this Brochure, the words "we," "our," and "us" refer to Addicus Advisory, LLC, and the words "you," "your," and "client" refer to you as either a client or prospective client of our firm. Portfolio Management Services We offer discretionary and non-discretionary portfolio management services. Our investment advice is tailored to meet our clients' needs and investment objectives. If you retain our firm for portfolio management services, we will meet with you to determine your investment objectives, risk tolerance, and other relevant information at the beginning of our advisory relationship. We will use the information we gather to develop a strategy that enables our firm to give you continuous and focused investment advice and/or to make investments on your behalf. As part of our portfolio management services, we may customize an investment portfolio for you according to your risk tolerance and investing objectives. We may also invest your assets according to one or more model portfolios. Once we construct an investment portfolio for you, or select a model portfolio, we will monitor your portfolio's performance on an ongoing basis, and will rebalance the portf olio as required by changes in market conditions and in your financial circumstances. If you participate in our discretionary portfolio management services, we require you to grant our firm discretionary authority to manage your account. Discretionary authorization will allow us to determine the specific securities, and the amount of securities, to be purchased or sold for your account without your approval prior to each transaction. Discretionary authority is typically granted by the investment advisory agreement you sign with our firm and the appropriate trading authorization forms. You may limit our discretionary authority (for example, limiting the types of securities that can be purchased or sold for your account) by providing our firm with your restrictions and guidelines in writing. If you enter into non-discretionary arrangements with our firm, we must obtain your approval prior to executing any transactions on behalf of your account. You have an unrestricted right to decline to implement any advice provided by our firm on a non-discretionary basis. As part of our portfolio management services, we may use one or more sub-advisers to manage a portion of your account on a discretionary basis. The sub-adviser(s) may use one or more of their model portfolios to manage your account. We will regularly monitor the performance of your accounts managed by sub-adviser(s), and may hire and fire any sub-adviser without your prior approval. We may pay a portion of our advisory fee to the sub-adviser(s) we use; however, you will not pay our firm a higher advisory fee as a result of any sub-advisory relationships. As mentioned above, we may invest your assets according to one or more model portfolios that have been developed by an unaffiliated investment manager. These models are designed for investors with varying degrees of risk tolerance ranging from a more aggressive investment strategy to a more conservative investment approach. Clients whose assets are invested in model portfolios may not set restrictions on the specific holdings or allocations within the model, nor the types of securities that can 4  be purchased in the model. Nonetheless, clients may impose restrictions on investing in certain securities or types of securities in their account. In such cases, this may prevent a client from investing in certain models that are managed by our firm. Financial Planning Services We offer financial planning services which typically involve providing a variety of advisory services to clients regarding the management of their financial resources based upon an analysis of their individual needs. These services can range from broad-based financial planning to consultative or single subject planning. If you retain our firm for financial planning services, we will meet with you to gather information about your financial circumstances and objectives. We may also use financial planning software to determine your current financial position and to define and quantify your long-term goals and objectives. Once we specify those long-term objectives (both financial and non-financial), we will develop shorter-term, targeted objectives. Once we review and analyze the information you provide to our firm and the data derived from our financial planning software, we will deliver a written plan to you, designed to help you achieve your stated financial goals and objectives. Financial plans are based on your financial situation at the time we present the plan to you, and on the financial information you provide to us. You must promptly notify our firm if your financial situation, goals, objectives, or needs change. You are under no obligation to act on our financial planning recommendations. Should you choose to act on any of our recommendations, you are not obligated to implement the financial plan through any of our other investment advisory services. Moreover, you may act on our recommendations by placing securities transactions with any brokerage firm. Financial Consulting Services We offer financial consulting services that primarily involve advising clients on specific financial-related topics and/or providing portfolio oversight through our global account aggregation program. The topics we address may include, but are not limited to, risk assessment/management, investment planning, financial organization, or financial decision making/negotiation. Selection of Other Advisers We may recommend that you use the services of a third party money manager ("TPMM") to manage all, or a portion of, your investment portfolio. After gathering information about your financial situation and objectives, we may recommend that you engage a specific TPMM or investment program. Factors that we take into consideration when making our recommendation(s) include, but are not limited to, the following: the TPMM's performance, methods of analysis, fees, your financial needs, investment goals, risk tolerance, and investment objectives. We will monitor the TPMM(s)' performance to ensure its management and investment style remains aligned with your investment goals and objectives. The TPMM(s) will actively manage your portfolio and will assume discretionary investment authority over your account. We will assume discretionary authority to hire and fire TPMM(s) and/or reallocate your assets to other TPMM(s) where we deem such action appropriate. Advisory Services to Private Pooled Investment Vehicles (Funds) We serve as the adviser to private pooled investment vehicles ("Funds") to which we are affiliated through common control and ownership. These private funds are offered to certain sophisticated investors who meet certain requirements under applicable state and/or federal securities laws. Investors to whom the Fund(s) is offered will receive a private placement memorandum and other offering documents. The fees charged by the Fund and payable to the associated (and affiliated) Managing Member are separate and apart from our advisory fees. You should refer to the offering documents for a complete description of the fees, investment objectives, risks and other relevant 5  information associated with investing in one or all of these affiliated Funds. Advisory clients may be solicited to invest in these funds. Persons affiliated with our firm may have made an investment in one or more of these Funds, and may have a financial incentive to recommend one or more of the affiliated Funds over other available investments. As a fiduciary, our firm and its associated persons will always act in our clients best interest. Wrap Fee Programs We do not participate in any wrap fee program. Types of Investments We offer advice on various types of securities, including, but not limited to: equity securities, corporate debt securities, commercial paper, exchange traded funds ("ETFs"), certificates of deposit, municipal securities, variable life insurance, variable annuities, mutual fund shares, United States government securities, options contracts on securities, and interests in partnerships investing in real estate, privately-held businesses, oil and gas, and private placement investments. Additionally, we may advise you on other various types of investments based on your stated goals and objectives. We may also provide advice on any type of investment held in your portfolio at the inception of our advisory relationship. Since our investment strategies and advice are based on each client's specific financial situation, the investment advice we provide to you may be different or conflicting with the advice we give to other clients regarding the same security or investment. IRA Rollover Recommendations For purposes of complying with the DOL's Prohibited Transaction Exemption 2020-02 ("PTE 2020-02") where applicable, we are providing the following acknowledgment to you. When we provide investment advice to you regarding your retirement plan account or individual retirement account, we are fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue Code, as applicable, which are laws governing retirement accounts. The way we make money creates some conflicts with your interests, so we operate under a special rule that requires us to act in your best interest and not put our interest ahead of yours. Under this special rule's provisions, we must: • Meet a professional standard of care when making investment recommendations (give prudent advice); • Never put our financial interests ahead of yours when making recommendations (give loyal advice); • Avoid misleading statements about conflicts of interest, fees, and investments; • Follow policies and procedures designed to ensure that we give advice that is in your best interest; • Charge no more than is reasonable for our services; and • Give you basic information about conflicts of interest. Assets Under Management As of December 31, 2024, we provide continuous management services for $118,286,052 in client assets on a discretionary basis, and $144,398,911 in client assets on a non-discretionary basis. 6  Item 5 Fees and Compensation Portfolio Management Services Our fee for portfolio management services is based on a percentage of the assets in your account and is set forth in the following annual fee schedule: Annual Fee Schedule Assets Under Management $0 - $3,000,000 $3,000,001 - $10,000,000 $10,000,001 - $25,000,000 $25,000,001 and above Annual Fee 1.45% 1.00% 0.85% 0.75% Our annual portfolio management fee is billed and payable, quarterly, or monthly, in arrears, based on the balance at end of billing period. If the portfolio management agreement is executed at any time other than the first day of a calendar month, our fees will apply on a pro rata basis, which means that the advisory fee is payable in proportion to the number of days in the month for which you are a client. Our advisory fee is negotiable, depending on individual client circumstances. At our discretion, we may combine the account values of family members living in the same household to determine the applicable advisory fee. For example, we may combine account values for you and your minor children, joint accounts with your spouse, and other types of related accounts. Combining account values may increase the asset total, which may result in your paying a reduced advisory fee based on the available breakpoints in our fee schedule stated above. We will deduct our fee directly from your account through the qualified custodian holding your funds and securities. We will deduct our advisory fee only when the following requirements are met: • You provide our firm with written authorization permitting the fees to be paid directly from your account held by the qualified custodian. • The qualified custodian agrees to send you a statement, at least quarterly, indicating all amounts dispersed from your account including the amount of the advisory fee paid directly to our firm. You may terminate the portfolio management agreement upon 30 days written notice. You will incur a pro rata charge for services rendered prior to the termination of the portfolio management agreement, which means you will incur advisory fees only in proportion to the number of days in the month for which you are a client. Portfolio Management Services - Private Funds We also provide portfolio management services on a one-time or ongoing basis to private funds, partnerships, and limited liability companies (other than registered investment companies), some of which may be managed by our affiliates. Our services will be subject to a written investment management agreement (or similar governing agreement) which will specify our fees as agreed with the client. 7  Financial Planning Services We charge a fixed fee for financial planning services, which generally ranges between $2,500 and $75,000. We may require that you pay up to 25% of the fee in advance and the remaining portion will be billed in arrears and is payable on a scheduled basis as invoiced. If such a fee is collected in advance, then the amount will be specified in the agreement signed by each client. The fee is negotiable depending upon the complexity and scope of the plan, your financial situation, and your objectives. We will not require prepayment of a fee more than six months in advance and in excess of $1,200. Should the engagement last longer than six months between acceptance of financial planning agreement and delivery of the financial plan, any prepaid unearned fees will be promptly returned to you less a pro rata charge for bona fide financial planning services rendered to date. You may terminate the financial planning agreement upon 30 days written notice to our firm. You will incur a pro rata charge for services rendered prior to the termination of the agreement. If you have pre- paid advisory fees that we have not yet earned, you will receive a prorated refund of those fees. Financial Consulting Services We charge a fixed fee for financial consulting services. Fixed fees are negotiable and range from $2,500 and $75,000, depending on the scope and complexity of services to be rendered. We may require that you pay up to 25% of the fee in advance and the remaining portion will be billed in arrears and is payable on scheduled basis as invoiced. If such a fee is collected in advance, then the amount will be specified in the agreement signed by each client. We will not require prepayment of a fee more than six months in advance and in excess of $1,200. Should the engagement last longer than six months between acceptance of financial consulting agreement and delivery of the agreed upon services, any prepaid unearned fees will be promptly returned to you less a pro rata charge for bona fide financial consulting services rendered to date. You may terminate the advisory consulting services agreement upon 30 days written notice to our firm. You will incur a pro rata charge for services rendered prior to the termination of the agreement. If you have pre-paid advisory fees that we have not yet earned, you will receive a prorated refund of those fees. Selection of Other Advisers Advisory fees charged by TPMMs are separate and apart from our advisory fees. Assets managed by TPMMs will be included in calculating our advisory fee, which is based on the fee schedule set forth in the Portfolio Management Services section in this brochure. Advisory fees that you pay to the TPMM are established and payable in accordance with the brochure provided by each TPMM to whom you are referred. These fees may or may not be negotiable. You should review the recommended TPMM's brochure and take into consideration the TPMM's fees along with our fees to determine the total amount of fees associated with this program. You may be required to sign an agreement directly with the recommended TPMM(s). You may terminate your advisory relationship with the TPMM according to the terms of your agreement with the TPMM. You should review each TPMM's brochure for specific information on how you may terminate your advisory relationship with the TPMM and how you may receive a refund, if applicable. You should contact the TPMM directly for questions regarding your advisory agreement with the TPMM. Additional Fees and Expenses As part of our investment advisory services to you, we may invest, or recommend that you invest, in mutual funds and exchange traded funds. The fees that you pay to our firm for investment advisory services are separate and distinct from the fees and expenses charged by mutual funds or exchange traded funds (described in each fund's prospectus) to their shareholders. These fees will generally 8  include a management fee and other fund expenses. You will also incur transaction charges and/or brokerage fees when purchasing or selling securities. These charges and fees are typically imposed by the broker-dealer or custodian through whom your account transactions are executed. We do not share in any portion of the brokerage fees/transaction charges imposed by the broker-dealer or custodian. To fully understand the total cost you will incur, you should review all the fees charged by mutual funds, exchange traded funds, our firm, and others. For information on our brokerage practices, refer to the Brokerage Practices section of this Brochure. Compensation for the Sale of Securities or Other Investment Products Persons providing investment advice on behalf of our firm are licensed as independent insurance agents. These persons will earn commission-based compensation for selling insurance products, including insurance products they sell to you. Insurance commissions earned by these persons are separate and in addition to our advisory fees. This practice presents a conflict of interest because persons providing investment advice on behalf of our firm, who are insurance agents, have an incentive to recommend insurance products to you for the purpose of generating commissions rather than solely based on your needs. You are under no obligation, contractually or otherwise, to purchase insurance products through any person affiliated with our firm. Item 6 Performance-Based Fees and Side-By-Side Management We do not accept performance-based fees or participate in side-by-side management, except for instances where we act as an Advisor to a Private Pooled Investment Vehicle ("Fund") as described in Item 4 (Advisory Business) of this brochure. The advisory fees charged to client accounts which we manage outside of these Funds, are calculated as described in Item 5 (Fees and Compensation) above, and are not charged on the basis of a share of capital gains upon, or capital appreciation. In instances where we do serve as adviser to any of the Funds outlined in Item 10 of this brochure, there will be a performance-based fee charged by the Fund, which ultimately benefits us and/or some of our associated persons. The Funds are only offered to certain sophisticated investors who meet certain requirements under applicable state and/or federal securities laws. These Funds which carry a performance-based fee are only offered to "qualified clients" having a net worth greater than $2,200,000 or for whom we manage at least $1,100,000 immediately after entering an agreement for our services. Investors to whom the Fund(s) are offered will receive a private placement memorandum and other offering documents which will outline the exact performance-based fee. However, the general terms of the performance-based fees charged by the Funds we manage is equal to a maximum 20% of the annual gross profits that exceed a watermark, which is defined in the Fund's offering documents. Since our advisory clients may be solicited to invest in these funds which carry a performance-based fee, clients should be aware of the conflict of interest that this presents, where persons affiliated with our firm may have a financial incentive to recommend one or more of the affiliated Funds over other available investments. As a fiduciary, our firm and its associated persons will always act in our clients best interest to mitigate this conflict. Side-by-side management might provide an incentive for our firm to favor Funds for which we receive a performance-based fee as opposed to other accounts. To address this conflict of interest, we have instituted policies and procedures that require our firm to allocate investment opportunities (if they are suitable) in an effort to avoid favoritism among our clients, regardless of whether the client is charged performance fees. 9  Item 7 Types of Clients We offer investment advisory services to individuals, high net worth individuals, and corporations or other business entities, including private funds, partnerships, and limited liability companies. In general, we do not require a minimum dollar amount to open and maintain an advisory account; however, we have the right to terminate your account if it falls below a minimum size which, in our sole opinion, is too small to manage effectively. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss Our Methods of Analysis and Investment Strategies We may use one or more of the following methods of analysis or investment strategies when providing investment advice to you: Fundamental Analysis - involves analyzing individual companies and their industry groups, such as a company's financial statements, details regarding the company's product line, the experience and expertise of the company's management, and the outlook for the company and its industry. The resulting data is used to measure the true value of the company's stock compared to the current market value. Risk: The risk of fundamental analysis is that information obtained may be incorrect and the analysis may not provide an accurate estimate of earnings, which may be the basis for a stock's value. If securities prices adjust rapidly to new information, utilizing fundamental analysis may not result in favorable performance. Modern Portfolio Theory - a theory of investment which attempts to maximize portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected return, by carefully diversifying the proportions of various assets. Risk: Market risk is that part of a security's risk that is common to all securities of the same general class (stocks and bonds) and thus cannot be eliminated by diversification. Long-Term Purchases - securities purchased with the expectation that the value of those securities will grow over a relatively long period of time, generally greater than one year. Risk: Using a long-term purchase strategy generally assumes the financial markets will go up in the long-term , which may not be the case. There is also the risk that the segment of the market that you are invested in or perhaps just your particular investment will go down over time even if the overall financial markets advance. Purchasing investments long-term may create an opportunity cost - "locking-up" assets that may be better utilized in the short-term in other investments. Short-Term Purchases - securities purchased with the expectation that they will be sold within a relatively short period of time, generally less than one year, to take advantage of the securities' short- term price fluctuations. Risk: Using a short-term purchase strategy generally assumes that we can predict how financial markets will perform in the short-term, which may be very difficult and will incur a disproportionately higher amount of transaction costs compared to long-term trading. There are many factors that 10  can affect financial market performance in the short-term (such as short-term interest rate changes, cyclical earnings announcements, etc.) but may have a smaller impact over longer periods of times. Our investment strategies and advice may vary depending upon each client's specific financial situation. As such, we determine investments and allocations based upon your predefined objectives, risk tolerance, time horizon, financial information, liquidity needs and other various suitability factors. Your restrictions and guidelines may affect the composition of your portfolio. It is important that you notify us immediately with respect to any material changes to your financial circumstances, including for example, a change in your current or expected income level, tax circumstances, or employment status. Tax Considerations Our strategies and investments may have unique and significant tax implications. However, unless we specifically agree otherwise, and in writing, tax efficiency is not our primary consideration in the management of your assets. Regardless of your account size or any other factors, we strongly recommend that you consult with a tax professional regarding the investing of your assets. Moreover, custodians and broker-dealers must report the cost basis of equities acquired in client accounts on or after January 1, 2011. Your custodian will default to the First-In First-Out ("FIFO") accounting method for calculating the cost basis of your investments. You are responsible for contacting your tax advisor to determine if this accounting method is the right choice for you. If your tax advisor believes another accounting method is more advantageous, provide written notice to our firm immediately and we will alert your account custodian of your individually selected accounting method. Decisions about cost basis accounting methods will need to be made before trades settle, as the cost basis method cannot be changed after settlement. Risk of Loss Investing in securities involves risk of loss that you should be prepared to bear. We do not represent or guarantee that our services or methods of analysis can or will predict future results, successfully identify market peaks or bottoms, or insulate clients from losses due to market corrections or declines. We cannot offer any guarantees or promises that your financial goals and objectives will be met. Past performance is in no way an indication of future performance. Other Risk Considerations When evaluating risk, financial loss may be viewed differently by each client and may depend on many different risks, each of which may affect the probability and magnitude of any potential losses. The following risks may not be all-inclusive, but should be considered carefully by a prospective client before retaining our services. Liquidity Risk: The risk of being unable to sell your investment at a fair price at a given time due to high volatility or lack of active liquid markets. You may receive a lower price, or it may not be possible to sell the investment at all. Credit Risk: Credit risk typically applies to debt investments such as corporate, municipal, and sovereign fixed income or bonds. A bond issuing entity can experience a credit event that could impair or erase the value of an issuer's securities held by a client. Inflation and Interest Rate Risk: Security prices and portfolio returns will likely vary in response to changes in inflation and interest rates. Inflation causes the value of future dollars to be worth less and may reduce the purchasing power of a client's future interest payments and principal. Inflation also generally leads to higher interest rates which may cause the value of many types of fixed income 11  investments to decline. Horizon and Longevity Risk: The risk that your investment horizon is shortened because of an unforeseen event, for example, the loss of your job. This may force you to sell investments that you were expecting to hold for the long term. If you must sell at a time that the markets are down, you may lose money. Longevity Risk is the risk of outliving your savings. This risk is particularly relevant for people who are retired, or are nearing retirement. Recommendation of Particular Types of Securities We recommend various types of securities, and we do not primarily recommend one particular type of security over another since each client has different needs and different tolerance for risk. Each type of security has its own unique set of risks associated with it and it would not be possible to list here all of the specific risks of every type of investment. Even within the same type of investment, risks can vary widely. However, in very general terms, the higher the anticipated return of an investment, the higher the risk of loss associated with the investment. A description of the types of securities we may recommend to you and some of their inherent risks are provided below. Money Market Funds: A money market fund is technically a security. The fund managers attempt to keep the share price constant at $1/share. However, there is no guarantee that the share price will stay at $1/share. If the share price goes down, you can lose some of or your principal. The US Securities and Exchange Commission ("SEC") notes that "While investor losses in money market funds have been rare, they are possible." In return for this risk, you should earn a greater return on your cash than you would expect from a Federal Deposit Insurance Corporation ("FDIC") insured savings account (money market funds are not FDIC insured). Next, money market fund rates are variable. In other words, you do not know how much you will earn on your investment next month. The rate could go up or go down. If it goes up, that may result in a positive outcome. However, if it goes down and you earn less than you expected to earn, you may end up needing more cash. A final risk you are taking with money market funds has to do with inflation. Because money market funds are considered to be safer than other investments like stocks, long-term average returns on money market funds tends to be less than long term average returns on riskier investments. Over long periods of time, inflation can eat away at your returns. Certificates of Deposit: Certificates of deposit are generally the safest type of investment since they are insured by the federal government up to a certain amount. However, because the returns are generally very low, it is possible for inflation to outpace the return. Likewise, United States government securities are backed by the full faith and credit of the United States government, but it is also possible for the rate of inflation to exceed the returns. Municipal Securities: Municipal securities, while generally thought of as safe, can have significant risks associated with them including, but not limited to: the credit worthiness of the governmental entity that issues the bond; the stability of the revenue stream that is used to pay the interest to the bondholders; when the bond is due to mature; and, whether or not the bond can be "called" prior to maturity. When a bond is called, it may not be possible to replace it with a bond of equal character paying the same amount of interest or yield to maturity. Bonds: Corporate debt securities (or "bonds") are typically safer investments than equity securities, but their risk can also vary widely based on the financial health of the issuer; the risk that the issuer might default; when the bond is set to mature; and, whether or not the bond can be "called" prior to maturity. When a bond is called, it may not be possible to replace it with a bond of equal character paying the same rate of return. 12  Stocks: There are numerous ways of measuring the risk of equity securities (also known simply as "equities" or "stock"). In very broad terms, the value of a stock depends on the financial health of the company issuing it. However, stock prices can be affected by many other factors including, but not limited to the class of stock (for example, preferred or common); the health of the market sector of the issuing company; and the overall health of the economy. In general, larger, better established companies ("large cap") tend to be safer than smaller start-up companies ("small cap") are but the mere size of an issuer is not, by itself, an indicator of the safety of the investment. Mutual Funds and Exchange Traded Funds: Mutual funds and exchange traded funds ("ETF") are professionally managed collective investment systems that pool money from many investors and invest in stocks, bonds, short-term money market instruments, other mutual funds, other securities, or any combination thereof. The fund will have a manager that trades the fund's investments in accordance with the fund's investment objective. While mutual funds and ETFs generally provide diversification, risks can be significantly increased if the fund is concentrated in a particular sector of the market, primarily invests in small cap or speculative companies, uses leverage (i.e., borrows money) to a significant degree, or concentrates in a particular type of security (i.e., equities) rather than balancing the fund with different types of securities. ETFs differ from mutual funds since they can be bought and sold throughout the day like stock and their price can fluctuate throughout the day. The returns on mutual funds and ETFs can be reduced by the costs to manage the funds. Also, while some mutual funds are "no load" and charge no fee to buy into, or sell out of, the fund, other types of mutual funds do charge such fees which can also reduce returns. Mutual funds can also be "closed end" or "open end". So-called "open end" mutual funds continue to allow in new investors indefinitely whereas "closed end" funds have a fixed number of shares to sell which can limit their availability to new investors. Commercial Paper: Commercial paper ("CP") is, in most cases, an unsecured promissory note that is issued with a maturity of 270 days or less. Being unsecured the risk to the investor is that the issuer may default. There is a less risk in asset based commercial paper (ABCP). The difference between ABCP and CP is that instead of being an unsecured promissory note representing an obligation of the issuing company, ABCP is backed by securities. Therefore, the perceived quality of the ABCP depends on the underlying securities. Variable Annuities: A variable annuity is a form of insurance where the seller or issuer (typically an insurance company) makes a series of future payments to a buyer (annuitant) in exchange for the immediate payment of a lump sum (single-payment annuity) or a series of regular payments (regular- payment annuity). The payment stream from the issuer to the annuitant has an unknown duration based principally upon the date of death of the annuitant. At this point, the contract will terminate, and the remainder of the funds accumulated forfeited unless there are other annuitants or beneficiaries in the contract. Annuities can be purchased to provide an income during retirement. Unlike fixed annuities that make payments in fixed amounts or in amounts that increase by a fixed percentage, variable annuities, pay amounts that vary according to the performance of a specified set of investments, typically bond and equity mutual funds. Many variable annuities typically impose asset-based sales charges or surrender charges for withdrawals within a specified period. Variable annuities may impose a variety of fees and expenses, in addition to sales and surrender charges, such as mortality and expense risk charges; administrative fees; underlying fund expenses; and charges for special features, all of which can reduce the return. Earnings in a variable annuity do not provide all the tax advantages of 401(k)s and other before-tax retirement plans. Once the investor starts withdrawing money from their variable annuity, earnings are taxed at the ordinary income rate, rather than at the lower capital gains rates applied to other non-tax-deferred vehicles which are held for more than one year. Proceeds of most variable annuities do not receive a "step-up" in cost basis when the owner dies like stocks, bonds and mutual funds do. Some variable annuities offer "bonus credits." These are usually not free. In order to fund them, insurance companies typically impose mortality and expense charges and 13  surrender charge periods. In an exchange of an existing annuity for a new annuity (so-called 1035 exchanges), the new variable annuity may have a lower contract value and a smaller death benefit; may impose new surrender charges or increase the period of time for which the surrender charge applies; may have higher annual fees; and provide another commission for the broker. Real Estate: Real estate is increasingly being used as part of a long-term core strategy due to increased market efficiency and increasing concerns about the future long-term variability of stock and bond returns. In fact, real estate is known for its ability to serve as a portfolio diversifier and inflation hedge. However, the asset class still bears a considerable amount of market risk. Real estate has shown itself to be very cyclical, somewhat mirroring the ups and downs of the overall economy. In addition to employment and demographic changes, real estate is also influenced by changes in interest rates and the credit markets, which affect the demand and supply of capital and thus real estate values. Along with changes in market fundamentals, investors wishing to add real estate as part of their core investment portfolios need to look for property concentrations by area or by property type. Because property returns are directly affected by local market basics, real estate portfolios that are too heavily concentrated in one area or property type can lose their risk mitigation attributes and bear additional risk by being too influenced by local or sector market changes. Real Estate Investment Trust: A real estate investment trust ("REIT") is a corporate entity which invests in real estate and/or engages in real estate financing. A REIT reduces or eliminates corporate income taxes. REITs can be publicly or privately held. Public REITs may be listed on public stock exchanges. REITs are required to declare 90% of their taxable income as dividends, but they actually pay dividends out of funds from operations, so cash flow has to be strong or the REIT must either dip into reserves, borrow to pay dividends, or distribute them in stock (which causes dilution). After 2012, the IRS stopped permitting stock dividends. Most REITs must refinance or erase large balloon debts periodically. The credit markets are no longer frozen, but banks are demanding, and getting harsher terms to re-extend REIT debt. Some REITs may be forced to make secondary stock offerings to repay debt, which will lead to additional dilution of the stockholders. Fluctuations in the real estate market can affect the REIT's value and dividends. Limited Partnerships or Limited Liability Companies: A limited partnership is a financial affiliation that includes at least one general partner and a number of limited partners. The partnership invests in a venture, such as real estate development or oil exploration, for financial gain. The general partner does not usually invest any capital, but has management authority and unlimited liability. That is, the general partner runs the business and, in the event of bankruptcy, is responsible for all debts not paid or discharged. The limited partners have no management authority and confine their participation to their capital investment. That is, limited partners invest a certain amount of money and have nothing else to do with the business. However, their liability is limited to the amount of the investment. In the worst-case scenario for a limited partner, he/she loses what he/she invested. Profits are divided between general and limited partners according to an arrangement formed at the creation of the partnership. Limited liability companies are similar in structure to limited partnerships, with a manager or managing member being analogous to the general partner and members being analogous to limited partners. As with limited partnerships, the non-managing members of a limited liability company enjoy limited liability and are not responsible for running the day-to-day operations of the company. Structured Products: A structured product, also known as a market-linked product, is generally a pre- packaged investment strategy based on derivatives, such as a single security, a basket of securities, options, indices, commodities, debt issuances, and/or foreign currencies, and to a lesser extent, swaps. Structured products are usually issued by investment banks or affiliates thereof. They have a fixed maturity, and have two components: a note and a derivative. The derivative component is often an option. The note provides for periodic interest payments to the investor at a predetermined rate, and the derivative component provides for the payment at maturity. Some products use the derivative 14  component as a put option written by the investor that gives the buyer of the put option the right to sell to the investor the security or securities at a predetermined price. Other products use the derivative component to provide for a call option written by the investor that gives the buyer of the call option the right to buy the security or securities from the investor at a predetermined price. A feature of some structured products is a "principal guarantee" function, which offers protection of principal if held to maturity. However, these products are not always Federal Deposit Insurance Corporation insured; they may only be insured by the issuer, and thus have the potential for loss of principal in the case of a liquidity crisis, or other solvency problems with the issuing company. Investing in structured products involves a number of risks including but not limited to fluctuations in the price, level or yield of underlying instruments, interest rates, currency values and credit quality; substantial loss of principal; limits on participation in any appreciation of the underlying instrument; limited liquidity; credit risk of the issuer; conflicts of interest; and other events that are difficult to predict. Item 9 Disciplinary Information We are required to disclose the facts of any legal or disciplinary events that are material to a client's evaluation of our advisory business or the integrity of our management. We do not have any required disclosures under this item. Item 10 Other Financial Industry Activities and Affiliations Affiliated Insurance Company We are affiliated with Addicus Risk Management, LLC, an insurance company, through common control and ownership. Therefore, persons providing investment advice on behalf of our firm may be licensed as insurance agents. These persons will earn commission-based compensation for selling insurance products, including insurance products they sell to you. Insurance commissions earned by these persons are separate from our advisory fees. See the Fees and Compensation section in this Brochure for more information on the compensation received by insurance agents who are affiliated with our firm. This affiliated firm is otherwise regulated by the professional organizations to which it belongs and must comply with the rules of those organizations. These rules may prohibit paying or receiving referral fees to or from investment advisers that are not members of the same organization. Affiliated Multi-Family Office We are affiliated with Addicus, LLC through common control and ownership. Addicus, LLC is a multi- family office that consults and advises multi-generational businesses in developing and managing their business enterprise. If appropriate and suitable for your needs, we may recommend that you use the services of Addicus, LLC. Our advisory services are separate and distinct from the compensation paid to Addicus, LLC for their services. Referral arrangements with an affiliated entity present a conflict of interest for us because we may have a direct or indirect financial incentive to recommend an affiliated firm's services. While we believe that compensation charged by an affiliated firm is competitive, such compensation may be higher than fees charged by other firms providing the same or similar services. You are under no obligation to use the services of any firm we recommend, whether affiliated or otherwise, and may obtain comparable services and/or lower fees through other firms. Affiliated Private Funds We are affiliated with Rubicon Capital, LLC, a holding company that wholly owns several limited liability companies that serve as Managing Member to various affiliated private pooled investment vehicles (private funds). The following list delineates affiliated private pooled investment vehicles and their associated management company, respectively: 15  Pooled Investment Vehicle (Fund) Cypress East Investors, LLC Premier Clay Investors, LLC Stamps Hollow Investments, LLC Management Company Cypress East Management, LLC Premier Clay Management, LLC Stamps Hollow Manager, LLC Holding Company Rubicon Capital, LLC Rubicon Capital, LLC Rubicon Capital, LLC We are also affiliated with Addicus Private Equity, LLC (not owned by Rubicon Capital, LLC), which serves as the management company to the following private pooled investment vehicles (private funds): Pooled Investment Vehicle (Fund) Ex Capital, LLC SC Coastal Properties, LLC Management Company Addicus Private Equity, LLC Addicus Private Equity, LLC We are affiliated with the below referenced management companies through common control and ownership. Each management company serves as the Managing Member to the delineated private pooled investment vehicle that we advise. Pooled Investment Vehicle (Fund) 222 Loyola Investors QOF, LLC Acadiana Clay Investors, LLC Allen Pines Investors, LLC Ambling Investments II, LLC Ambling Investments III, LLC Ambling Investments, LLC Avery Trace Investors, LLC Bee Rock Investors, LLC Big Creek Investors, LLC Breakwater Investments, LLC Canard Clay Investors, LLC Clark Range Investors, LLC Consortium Energy Fund, LLC Cumberland Gap Investors, LLC Davis Clay Investors, LLC Falling Water Investors, LLC Genysis Venture Fund, LLC Glasswrx Beaufort QOF, LLC Grand Caly Investors, LLC Hart Sands Investors, LLC Kinder Reserve Investors, LLC Lagniappe Clay Investors, LLC Maple Hill Investors, LLC Mysa Hospitality Fund, LLC Management Company 222 LOYOLA QOF MANAGER, LLC ACADIANA CLAY MANAGER, LLC ALLEN PINES MANAGER, LLC AMBLING INVESTMENTS II MANAGER, LLC AMBLING INVESTMENTS III MANAGER, LLC AMBLING INVESTMENTS MANAGER, LLC AVERY TRACE MANAGER, LLC BEE ROCK MANAGER, LLC BIG CREEK MANAGER, LLC BREAKWATER MANAGEMENT, LLC CANARD CLAY MANAGER, LLC CLARK RANGE MANAGER, LLC CONSORTIUM ENERGY FUND MANAGER, LLC CUMBERLAND GAP MANAGER, LLC DAVIS CLAY MANAGER, LLC FALLING WATER MANAGER, LLC GENYSIS MANAGER, LLC GLASSWRX BEAUFORT QOF MANAGER, LLC GRAND CLAY MANAGER, LLC HART SANDS MANAGER, LLC KINDER RESERVE MANAGER, LLC LAGNIAPPE CLAY MANAGER, LLC MAPLE HILL MANAGER, LLC MYSA HOSPITALITY FUND MANAGER, LLC NET LEASE PROPERTIES FUND I MANAGER, LLC Net Lease Properties Fund I, LLC NOLIN SANDS MANAGER, LLC Nolin Sands Investors, LLC 16  PIEDMONT SOLAR MANAGER, LLC PRIME PROPERTIES FUND I MANAGER, LLC RIVER BIRCH MANAGER, LLC SABINE CLAY MANAGER, LLC SILAS MINE INVESTMENTS MANAGER, LLC SPRING VALLEY MANAGER, LLC STOKES PLATEAU MANAGER, LLC WOODBURY SOLAR MANAGER, LLC Piedmont Solar Investors, LLC Prime Properties Fund I, LLC River Birch Investments, LLC Sabine Clay Investors, LLC Silar Mine Investments, LLC Spring Valley Investors, LLC Stokes Plateau Investors, LLC Woodbury Solar Investors, LLC Our firm, Addicus Advisory, LLC, serves as the adviser to each of the above referenced Funds, to which you may be solicited to invest. These private funds are offered to certain sophisticated investors who meet certain requirements under applicable state and/or federal securities laws. Investors to whom the Fund(s) is offered will receive a private placement memorandum and other offering documents. The fees charged by the Fund and payable to the associated (and affiliated) Managing Member are separate and apart from our advisory fees. You should refer to the offering documents for a complete description of the fees, investment objectives, risks and other relevant information associated with investing in one or all of these affiliated Funds. Persons affiliated with our firm may have made an investment in one or more of these Funds, and may have a financial incentive to recommend one or more of the affiliated Funds over other available investments. As a fiduciary, our firm and its associated persons will always act in our clients best interest. Silas Mine Investments, LLC We are affiliated with D&I Land Management, LLC, the holding company that wholly owns Silas Mine Investments Manager, LLC , which serves as the Managing Member of Silas Mine Investments, LLC, a private pooled investment vehicle (hereinafter referred to as the "Silas Fund"). We serve as the adviser to the Silas Fund. While certain clients of our advisory firm may already be invested in the Silas Fund, the Silas Fund is now closed to new investors. The Silas Fund was only offered to certain sophisticated investors who meet certain requirements under applicable state and/or federal securities laws. Investors to whom the Silas Fund was offered should have received a private placement memorandum and other offering documents. The fees charged by the Silas Fund and payable to its Managing Member are separate and apart from our advisory fees. You should refer to the offering documents for a complete description of the fees, investment objectives, risks and other relevant information associated with investing in the Silas Fund. Persons affiliated with our firm may have made an investment in the Silas Fund and may have an incentive to recommend the Silas Fund over other investments. Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Description of Our Code of Ethics We strive to comply with applicable laws and regulations governing our practices. Therefore, our Code of Ethics includes guidelines for professional standards of conduct for persons associated with our firm. Our goal is to protect your interests at all times and to demonstrate our commitment to our fiduciary duties of honesty, good faith, and fair dealing with you. All persons associated with our firm are expected to adhere strictly to these guidelines. Persons associated with our firm are also required to report any violations of our Code of Ethics. Additionally, we maintain and enforce written policies reasonably designed to prevent the misuse or dissemination of material, non-public information about you or your account holdings by persons associated with our firm. 17  Clients or prospective clients may obtain a copy of our Code of Ethics by contacting us at the telephone number on the cover page of this Brochure. Participation or Interest in Client Transactions Neither our firm nor any persons associated with our firm has any material financial interest in client transactions beyond the provision of investment advisory services as disclosed in this Brochure provided that we or our affiliates may invest in or alongside any private fund, partnership, or limited liability company for which we provide investment advisory services. Personal Trading Practices Our firm or persons associated with our firm may buy or sell the same securities that we recommend to you or securities in which you are already invested. A conflict of interest exists in such cases because we have the ability to trade ahead of you and potentially receive more favorable prices than you will receive. To mitigate this conflict of interest, it is our policy that neither our firm nor persons associated with our firm shall have priority over your account in the purchase or sale of securities. Block Trading Our firm or persons associated with our firm may buy or sell securities for you at the same time we or persons associated with our firm buy or sell such securities for our own account. We may also combine our orders to purchase securities with your orders to purchase securities ("block trading"). Refer to the Brokerage Practices section in this Brochure for information on our block trading practices. A conflict of interest exists in such cases because we have the ability to trade ahead of you and potentially receive more favorable prices than you will receive. To mitigate this conflict of interest, it is our policy that neither our firm nor persons associated with our firm shall have priority over your account in the purchase or sale of securities. Item 12 Brokerage Practices We maintain relationships with several broker-dealers. While you are free to choose any broker-dealer or other service provider, we recommend that you establish an account with a brokerage firm with which we have an existing relationship. Such relationships may include benefits provided to our firm, including but not limited to market information and administrative services that help our firm manage your account(s). We believe that recommended broker-dealers provide quality execution services for our clients at competitive prices. Price is not the sole factor we consider in evaluating best execution. We also consider the quality of the brokerage services provided by recommended broker-dealers, including the value of the firm's reputation, execution capabilities, commission rates, and responsiveness to our clients and our firm. In recognition of the value of the services recommended broker-dealers provide, you may pay higher commissions and/or trading costs than those that may be available elsewhere. Research and Other Soft Dollar Benefits Refer to Economic Benefits section below. Economic Benefits As a registered investment adviser, we have access to the institutional platform of your account custodian. As such, we will also have access to research products and services from your accounting custodian and/or other brokerage firm. These products may include financial publications, information about particular companies and industries, research software, and other products or services that provide lawful and appropriate assistance to our firm in the performance of our investment decision- making responsibilities. Such research products and services are provided to all investment advisers that utilize the institutional services platforms of these firms, and may or may not be considered to be 18  paid for with soft dollars, depending on the jurisdiction. However, you should be aware that the commissions charged by a particular broker for a particular transaction or set of transactions may be greater than the amounts another broker who did not provide research services or products might charge. Brokerage for Client Referrals We do not receive client referrals from broker-dealers in exchange for cash or other compensation, such as brokerage services or research. Directed Brokerage In limited circumstances, and at our discretion, some clients may instruct our firm to use one or more particular brokers for the transactions in their accounts. If you choose to direct our firm to use a particular broker, you should understand that this might prevent our firm from aggregating trades with other client accounts or from effectively negotiating brokerage commissions on your behalf. This practice may also prevent our firm from obtaining favorable net price and execution. Thus, when directing brokerage business, you should consider whether the commission expenses, execution, clearance, and settlement capabilities that you will obtain through your broker are adequately favorable in comparison to those that we would otherwise obtain for you. Block Trades We combine multiple orders for shares of the same securities purchased for discretionary advisory accounts we manage (this practice is commonly referred to as "block trading"). We will then distribute a portion of the shares to participating accounts in a fair and equitable manner. Generally, participating accounts will pay a fixed transaction cost regardless of the number of shares transacted. In certain cases, each participating account pays an average price per share for all transactions and pays a proportionate share of all transaction costs on any given day. In the event an order is only partially filled, the shares will be allocated to participating accounts in a fair and equitable manner, typically in proportion to the size of each client's order. Accounts owned by our firm or persons associated with our firm may participate in block trading with your accounts; however, they will not be given preferential treatment. We do not block trade for non-discretionary accounts. Accordingly, non-discretionary accounts may pay different costs than discretionary accounts pay. If you enter into non-discretionary arrangements with our firm, we may not be able to buy and sell the same quantities of securities for you and you may pay higher commissions, fees, and/or transaction costs than clients who enter into discretionary arrangements with our firm. Item 13 Review of Accounts Portfolio Management Reviews Stephen D. Miles, Chief Compliance Officer and Investment Adviser Representative of Addicus Advisory, LLC, along with the advisory representative assigned to your account will monitor your accounts on an ongoing basis and will conduct account reviews at least at least annually, to ensure the advisory services provided to you are consistent with your investment needs and objectives. Additional reviews may be conducted based on various circumstances, including, but not limited to, contributions and withdrawals, year-end tax planning, market moving events, security specific events, and/or changes in your risk/return objectives. The individuals conducting reviews may vary from time to time, as personnel join or leave our firm. 19  Financial Planning Reviews Stephen D. Miles, Chief Compliance Officer and Investment Adviser Representative of Addicus Advisory, LLC, along with the advisory representative assigned to your account will review financial plans as needed, depending on the arrangements made with you at the inception of your advisory relationship to ensure that the advice provided is consistent with your investment needs and objectives. Generally, we will contact you periodically to determine whether any updates may be needed based on changes in your circumstances. Changed circumstances may include, but are not limited to marriage, divorce, birth, death, inheritance, lawsuit, retirement, job loss and/or disability, among others. We recommend meeting with you at least annually to review and update your plan if needed. Additional reviews may be conducted upon your request. Written updates to the financial plan will be provided in conjunction with the review. If you implement financial planning advice, you will receive trade confirmations and monthly or quarterly statements from relevant custodians. Item 14 Client Referrals and Other Compensation As disclosed under the Fees and Compensation section in this Brochure, persons providing investment advice on behalf of our firm are licensed insurance agents. For information on the conflicts of interest this presents, and how we address these conflicts, refer to the Fees and Compensation section. We do not receive any compensation from any third party in connection with providing investment advice to you nor do we compensate any individual or firm for client referrals. Refer to the Brokerage Practices section above for disclosures on research and other benefits we may receive resulting from our relationship with your account custodian. Item 15 Custody As paying agent for our firm, your independent custodian will directly debit your account(s) for the payment of our advisory fees. This ability to deduct our advisory fees from your accounts causes our firm to exercise limited custody over your funds or securities. We do not have physical custody of any of your funds and/or securities. Your funds and securities will be held with a bank, broker-dealer, or other qualified custodian. You will receive account statements from the qualified custodian(s) holding your funds and securities at least quarterly. The account statements from your custodian(s) will indicate the amount of our advisory fees deducted from your account(s) each billing period. You should carefully review account statements for accuracy. We will also provide statements to you reflecting the amount of the advisory fee deducted from your account. You should compare our statements with the statements from your account custodian(s) to reconcile the information reflected on each statement. If you have a question regarding your account statement, or if you did not receive a statement from your custodian, contact us immediately at the telephone number on the cover page of this Brochure. Standing Letters of Authorization (SLOA) Our firm, or persons associated with our firm, may effect wire transfers from client accounts to one or more third parties designated, in writing, by the client without obtaining written client consent for each separate, individual transaction, as long as the client has provided us with written authorization to do so. Such written authorization is known as a Standing Letter of Authorization. An adviser with authority to conduct such third party wire transfers or to sign checks on a client's behalf has access to the client's assets, and therefore has custody of the client's assets in any related accounts. 20  However, we do not have to obtain a surprise annual audit, as we otherwise would be required to by reason of having custody, as long as we meet the following criteria: 1. You provide a written, signed instruction to the qualified custodian that includes the third party's name and address or account number at a custodian; 2. You authorize us in writing to direct transfers to the third party either on a specified schedule or from time to time; 3. Your qualified custodian verifies your authorization (e.g., signature review) and provides a transfer of funds notice to you promptly after each transfer; 4. You can terminate or change the instruction; 5. We have no authority or ability to designate or change the identity of the third party, the address, or any other information about the third party; 6. We maintain records showing that the third party is not a related party to us nor located at the same address as us; and 7. Your qualified custodian sends you, in writing, an initial notice confirming the instruction and an annual notice reconfirming the instruction. We hereby confirm that we meet the above criteria when a client establishes a third-party SLOA within their custodial account. Affiliated Private Fund and Custody As disclosed under Item 10 of this Brochure, we serve as the investment adviser to various affiliated pooled investment vehicles. Our clients may be solicited to invest in these affiliated private funds so long as the client meets certain requirements under applicable state and/or federal securities laws. Investors to whom the private fund(s) is offered will receive a private placement memorandum and other offering documents. Please refer to applicable disclosures under Item 10 (Other Financial Industry Activities and Affiliations) for more information on the investments. In our capacity as investment adviser to the various private funds, we will have access to each Fund's funds and securities, and therefore have custody over such funds and securities. We provide each investor in the Fund(s) with audited annual financial statements. If you are a private fund investor and have questions regarding the financial statements or if you did not receive a copy, please contact us directly at the telephone number on the cover page of this Brochure. Item 16 Investment Discretion Before we can buy or sell securities on your behalf, you must first sign our discretionary management agreement and the appropriate trading authorization forms. You may grant our firm discretion over the selection and amount of securities to be purchased or sold for your account(s) without obtaining your consent or approval prior to each transaction. You may specify investment objectives, guidelines, and/or impose certain conditions or investment parameters for your account(s). For example, you may specify that the investment in any particular stock or industry should not exceed specified percentages of the value of the portfolio and/or restrictions or prohibitions of transactions in the securities of a specific industry or security. Refer to the Advisory Business section in this Brochure for more information on our discretionary management services. If you enter into non-discretionary arrangements with our firm, we will obtain your approval prior to the execution of any transactions for your account(s). You have an unrestricted right to decline to implement any advice provided by our firm on a non-discretionary basis. 21  Item 17 Voting Client Securities We will not vote proxies on behalf of your advisory accounts. At your request, we may offer you advice regarding corporate actions and the practice of your proxy voting rights. If you own shares of applicable securities, you are responsible for exercising your right to vote as a shareholder. In most cases, you will receive proxy materials directly from the account custodian. However, in the event we were to receive any written or electronic proxy materials, we would forward them directly to you by mail, unless you have authorized our firm to contact you by electronic mail, in which case, we would forward any electronic solicitations to vote proxies. Item 18 Financial Information Our firm does not have any financial condition or impairment that would prevent us from meeting our contractual commitments to you. We do not take physical custody of client funds or securities, or serve as trustee or signatory for client accounts, and we do not require the prepayment of more than $1200 in fees six or more months in advance. Therefore, we are not required to include a financial statement with this Brochure. We have not filed a bankruptcy petition at any time in the past ten years. Item 19 Additional Information Trade Errors In the event a trading error occurs in your account, our policy is to restore your account to the position it should have been in had the trading error not occurred. Depending on the circumstances, corrective actions may include canceling the trade, adjusting an allocation, and/or reimbursing the account. Class Action Lawsuits We do not determine if securities held by you are the subject of a class action lawsuit or whether you are eligible to participate in class action settlements or litigation nor do we initiate or participate in litigation to recover damages on your behalf for injuries as a result of actions, misconduct, or negligence by issuers of securities held by you. IRA Rollover Considerations As part of our investment advisory services to you, we may recommend that you withdraw the assets from your employer's retirement plan and roll the assets over to an individual retirement account ("IRA") that we will manage on your behalf. If you elect to roll the assets to an IRA that is subject to our management, we will charge you an asset based fee as set forth in the agreement you executed with our firm. This practice presents a conflict of interest because persons providing investment advice on our behalf have an incentive to recommend a rollover to you for the purpose of generating fee based compensation rather than solely based on your needs. You are under no obligation, contractually or otherwise, to complete the rollover. Moreover, if you do complete the rollover, you are under no obligation to have the assets in an IRA managed by our firm. 22  Many employers permit former employees to keep their retirement assets in their company plan. Also, current employees can sometimes move assets out of their company plan before they retire or change jobs. In determining whether to complete the rollover to an IRA, and to the extent the following options are available, you should consider the costs and benefits of: 1. Leaving the funds in your employer's (former employer's) plan. 2. Moving the funds to a new employer's retirement plan. 3. Cashing out and taking a taxable distribution from the plan. 4. Rolling the funds into an IRA rollover account. Each of these options has advantages and disadvantages and before making a change we encourage you to speak with your CPA and/or tax attorney. If you are considering rolling over your retirement funds to an IRA for us to manage here are a few points to consider before you do so: 1. Determine whether the investment options in your employer's retirement plan address your needs or whether you might want to consider other types of investments. a. Employer retirement plans generally have a more limited investment menu than IRAs. b. Employer retirement plans may have unique investment options not available to the public such as employer securities, or previously closed funds. 2. Your current plan may have lower fees than our fees. a. If you are interested in investing only in mutual funds, you should understand the cost structure of the share classes available in your employer's retirement plan and how the costs of those share classes compare with those available in an IRA. b. You should understand the various products and services you might take advantage of at an IRA provider and the potential costs of those products and services. 3. Our strategy may have higher risk than the option(s) provided to you in your plan. 4. Your current plan may also offer financial advice. 5. If you keep your assets titled in a 401k or retirement account, you could potentially delay your required minimum distribution beyond age 73. 6. Your 401k may offer more liability protection than a rollover IRA; each state may vary. a. Generally, federal law protects assets in qualified plans from creditors. Since 2005, IRA assets have been generally protected from creditors in bankruptcies. However, there can be some exceptions to the general rules so you should consult with an attorney if you are concerned about protecting your retirement plan assets from creditors. 7. You may be able to take out a loan on your 401k, but not from an IRA. 8. IRA assets can be accessed any time; however, distributions are subject to ordinary income tax and may also be subject to a 10% early distribution penalty unless they qualify for an exception such as disability, higher education expenses or the purchase of a home. 9. If you own company stock in your plan, you may be able to liquidate those shares at a lower capital gains tax rate. 10. Your plan may allow you to hire us as the manager and keep the assets titled in the plan name. It is important that you understand the differences between these types of accounts and to decide whether a rollover is best for you. Prior to proceeding, if you have questions contact your investment adviser representative, or call our main number as listed on the cover page of this brochure. 23