Advanced Equities Inc

Fees and Compensation

Management Fees

All managed accounts charge a quarterly advisory fee based on the account’s balance on the last
business day of each calendar quarter (March 31, June 30, September 30, and December 31). This fee
is generally charged in advance for the management to be provided over the next calendar quarter.
For an account that is opened in the middle of the quarter, that account will be charged a prorated
advisory fee for that quarter and the account will be billed when it is opened. For an account that is
closed, the account will charged a prorated fee and the amount that is not earned will be refunded.
The following is the maximum fee schedule for the managed accounts. IARs are allowed to negotiate
lower fees with their clients.
                                                          Fee
          Portfolio Size                    Max                Negotiated
          1st $1,000,000                    3%          or     (______)%
          $1,000,000 to $3,000,000          2.75%       or     (______)%
          $3,000,000 & Higher               2.50%       or      (______)%

Advisory fees are debited directly from the account at the beginning of each quarter based upon the
value of the assets as of the last business day of the previous quarter. The account statements
clients receive from the custodian will reflect the payment of these fees. The above fee schedule is
the maximum fee the client pays as management fees. These fees are split among AEI, the TPAM,
Programs and Custodians. Even though the above fee schedule is the maximum a client will be
charged, the TPAM fee, Program fee, and the Custodial fee may be debited separately and may be
displayed as separate line items on client statements.

AEI’s Agreement with a TPAM may be terminated by either party upon written notice to the other
party. The TPAM shall be obligated to pay AEI the amounts to which AEI is entitled pursuant to
the fee schedule set forth in the Agreement.

Transaction Costs

Clients will pay custodial fees and transaction costs for the purchase and sale of securities in their
accounts. Clients may incur additional fees charged by the custodian such as electronic funds and
wire transfer fees, transfer taxes, exchange fees, etc. AEI may receive part of the commissions paid
by the client. A more complete description of AEI’s brokerage practices and any conflicts therein
may be found in the Brokerage Practices section.

In addition, purchasers of mutual fund shares pay management fees to the investment advisers of the
mutual funds and certain funds have other types of fees or charges, including 12b-1 fees,
administrative fees, or shareholder servicing fees. These fees may be deducted from the net asset
value of the mutual funds that are held in a client’s portfolio. These types of fees are routinely borne
by all mutual fund shareholders as an indirect expense to their account and are in addition to the

management fees charged by AEI.

All fees paid to AEI are separate and distinct from the management fees and expenses charged by any
mutual funds. All mutual fund fees and expenses are detailed in the funds’ prospectuses and should
be carefully reviewed by the client so that they fully understand the total fees and expenses involved.

Please Note: Investment advisory representatives of AEI are also licensed as registered
representatives of AEI, and as such, may earn commissions and compensation on their advisory
clients’ trades. This arrangement, including AEI’s role as broker-dealer, is discussed more fully in
the Other Financial Industry Activities and Affiliations section.

               Performance-Based Fees and Side-By-Side Management

AEI may be compensated by the LLCs on the terms described in the operating agreement of each
LLC. This compensation is a back-end performance fee based on the value of distributions made to
the members of an LLC.

None of the LLCs are charged an ongoing management fee.

None of the managed accounts are charged a performance fee.

Types of Clients

AEI services accounts for pooled investment limited liability companies, individuals, high net worth
individuals, banking institutions, pension plans, profit sharing plans, charitable organizations, and
other corporations and businesses. The majority of these accounts are opened for pooled investments
into mid to late stage companies that AEI raises capital for.

                   Methods of Analysis, Investment Strategies and Risk of Loss

AEI does not actively manage client accounts. Some of the TPAMs with whom AEI places clients’
assets may utilize the fundamentals of modern portfolio theory to determine their asset allocations.
They may also employ various software programs that utilize modern portfolio theory to combine
various asset classes when designing a portfolio. Each of the Asset Managers may utilize different
sources of information in providing investment advice. Additional information about each TPAM’s
method of analysis and investment strategy is described more completely in their respective ADV
Form Part 2As.

In its selection of a TPAM, AEI conducts a review of the TPAMs’ managers or platforms before
entering into an agreement to refer clients’ assets to the TPAM. Each third party money manager is
requested to complete a due diligence questionnaire prior to AEI approving them and annually
thereafter. In addition, AEI may conduct on site visits and interview officers of TPAMs as part of the
due diligence. Finally, AEI may conduct an annual review of the TPAMs offered through its wrap fee
programs.

Moreover, in its analysis of selecting TPAMs, AEI has arranged with various wrap fee sponsors to
perform due diligence and reporting services on available TPAMs. The wrap fee sponsors also assist
IARs in selecting a TPAM that is appropriate for a client’s investment objectives.

AEI may rely solely on due diligence performed by third parties such as SEI and Envestnet for the
TPAMs offered through such third parties.

Investing in securities involves various risks, including market risk, interest rate risk, exchange risk,
currency risk, economic risk, political risk, etc. A client should be aware that the value of their
portfolio may decrease if there is adverse activity with respect to any of these risks. Also, clients
should understand that there is a higher probability of loss in accounts with a high risk tolerance level.

All investment programs have certain risks that are borne by the investor. Our investment approach
constantly keeps the risk of loss in mind. Investors face the following investment risks:

      Interest Rate Risk: Fluctuations in interest rates may cause investment prices to fluctuate. For
       example, when interest rates rise, yields on existing bonds become less attractive causing their
       market values to decline.

      Market Risk: The price of a security, bond, or mutual fund may drop in reaction to tangible
       and intangible events and conditions. This type of risk is caused by external factors
       independent of a security’s particular underlying circumstances. For example, political,
       economic and social conditions may trigger market events.

      Inflation Risk: When any type of inflation is present a dollar today will not buy as much as a
       dollar next year because purchasing power is eroding at the rate of inflation.

      Currency Risk: Overseas investments are subject to fluctuations in the value of the dollar
       against the currency of the investment’s originating country. This is also referred to as
       exchange rate risk.

      Reinvestment Risk: This is the risk that future proceeds from investments may have to be
       reinvested at a potentially lower rate of return (i.e. interest rate). This primarily relates to fixed
       income securities.

      Business Risk: These risks are associated with a particular industry or a particular company
       within an industry. For example, oil-drilling companies depend on finding oil and then
       refining it before they can generate a profit. They carry a higher risk of profitability than an
       electric company, which generates its income from a steady stream of customers who buy
       electricity no matter what the economic environment is like.

      Liquidity Risk: Liquidity is the ability to readily convert an investment into cash. Generally,
       assets are more liquid if many traders are interested in a standardized product. For example,
       Treasury Bills are highly liquid, while real estate properties are not.

      Financial Risk: Excessive borrowing to finance a business’ operations increases the risk of
       profitability because the company must meet the terms of its obligations in good times and
       bad. During periods of financial stress, the inability to meet loan obligations may result in
       bankruptcy and/or a declining market value.

Past performance does not guarantee future results.