Almitas Capital LLC

Item 5 – Fees and Compensation

A.      Fee Schedule
The fees and compensation payable to Almitas are negotiable and vary among its Clients.
However, the range of compensation is generally as follows:
        1.      Management Fee
Almitas’ quarterly management fee for Investors in the Funds is generally 0.25% (a 1%
annual rate). However, the Firm may change or waive such fees in its sole discretion.

        2.      Incentive Fee
Almitas generally receives an incentive fee equal to a percentage of the net income allocated
to each Investor for the quarter, but only to the extent net income allocated to that Investor
exceeds any cumulative losses that were allocated to that Investor for earlier periods and that
have not been recovered (a “high water mark”). The maximum incentive fee that could be
charged pursuant to the Funds’ Governing Documents is 15%.
The incentive fee, when assessed, will only be charged to accounts of those Investors and
Clients (respectively) who are “qualified clients” as defined in Rule 205-3 of the Investment
Advisers Act of 1940, as amended (“Advisers Act”). Almitas may change or waive the incentive
fees in its sole discretion.
        3.      Fee Comparison
The expenses of the Funds, including the management fee and incentive fee that may be
assessed, may constitute a higher percentage of average net assets than would be found in
other investment vehicles.
B.      Payment of Fees
Management fees, incentive fees, and third-party fees (discussed below) are deducted from
Fund assets. Management fees, which are paid in arrears, are withdrawn at the end of each
month. Incentive fees are allocated as of the last business day of the calendar year and as of
any date on which an Investor makes a withdrawal or receives a distribution from its
account(s).
C.      Third-Party Fees
The Funds shall pay such costs and expenses as Almitas shall reasonably determine to be
necessary, appropriate, advisable or convenient to carry on its business and realize its
objective, including but not limited to: (i) management fees; (ii) all general investment
expenses (i.e., expenses which the Firm reasonably determines to be directly related to the
investment of the Client’s assets); (iii) all administrative, legal, accounting, auditing, record-
keeping, tax form preparation, compliance and consulting costs and expenses; (iv) fees, costs

                                                                             Part 2A of ADV:
                                                                Almitas Capital LLC Brochure

and expenses of third-party service providers that provide such services; and, (v) any
extraordinary expenses, among other expenses.
Almitas’ fees are exclusive of brokerage commissions, transaction fees, and other related
costs and expenses which shall be incurred by the Funds. Such charges, fees and commissions
are exclusive of and in addition to Almitas’ management fee, and the Firm shall not receive
any portion of these commissions, fees, and costs.
Please see Item 12 of this Brochure regarding brokerage.
D.     Outside Compensation for the Sale of Securities
Neither Almitas nor its supervised persons accept compensation for the sale of securities or
other investment products outside of its association with the Firm.

The foregoing discussion in Item 5 represents Almitas’ basic compensation
arrangements. The management fees and incentive fees described above are
structured to comply with Rule 205-3 under the Advisers Act and applicable state laws.
Fees and other compensation are negotiable in certain circumstances and
arrangements with any particular Client or Investor may vary. Although Almitas
believes its fees are competitive, lower fees for comparable services may be available
from other investment advisers.

                                                                                  Part 2A of ADV:
                                                                     Almitas Capital LLC Brochure

Item 7 – Types of Clients

Almitas provides investment advisory services to the Funds. Almitas may in the future
provide services to additional or different types of Clients.
The Firm intends to restrict the number of Investors in the Funds and will offer Interests only
through non-public transactions in order to maintain their exclusion from “investment
company” status under the Investment Company Act of 1940, as amended (the “Investment
Company Act”).
Each Investor generally must be an “accredited investor” (as defined in Regulation D under
the Securities Act of 1933), an Investor who is eligible to enter into a performance fee
arrangement under federal law and must meet other criteria as specified in the Governing
Documents. Prospective Investors in the Funds must meet eligibility criteria and are subject
to certain withdrawal requirements and limitations. Prospective Investors are encouraged to
thoroughly review the Funds’ Governing Documents, which set forth all of the terms in detail.

                                                                               Part 2A of ADV:
                                                                  Almitas Capital LLC Brochure