Blue Capital Inc

Fees and Compensation

The following types of fees will be assessed:

Asset Management – Fees are charged in arrears and are based primarily on asset size and the
level of complexity of the services provided. In individual cases, BCI has the sole discretion to
negotiate fees that are lower than the standard fee shown or to waive fees. Fees are not based on
the share of capital gains or capital appreciation of the funds or any portion of the funds.
Comparable services for lower fees may be available from other sources. Fees for the initial
month will be prorated based upon the number of calendar days in the calendar month that the
advisory agreement is in effect. Fees are calculated based on the value of assets on the last of the
month. Annual fees range from 1.00% - 1.50%, depending on the amount of assets under
management (“AUM”) – See chart below. Consulting services are included in these fees for
asset management services with the exception of unique circumstances that may require a
separate agreement for financial planning services (description and fees are discussed below). If
the situation warrants separate financial planning fees, it will be discussed upfront and a
separate agreement will be negotiated.

Fee Schedule for Asset Management:

    Total Account Value                                 Maximum Annual Advisory Fee
  Up to $1,000,000                                                    1.50%
  $1,000,001 - $2,000,000                                             1.40%
  $2,000,001 – $5,000,000                                             1.30%
  $5,000,001 - $10,000,000                                            1.20%
 $10,000,001 or more                                                  1.00%

As authorized in the client agreement, the account custodian withdraws Blue Capital, Inc.’s
advisory fees directly from the clients’ accounts according to the custodian’s policies, practices,
and procedures. The custodial statement includes the amount of any fees paid to BCI for
advisory services. You should carefully review the statement from your custodian/broker-
dealer’s statement and verify the calculation of fees. Your custodian/broker-dealer does not
verify the accuracy of fee calculations.

Fees are charged in arrears on a monthly basis, meaning that advisory fees for a month are
charged on the first day of the following month. Clients may terminate investment advisory
services obtained from BCI, without penalty, upon written notice within five (5) business days
after entering into the advisory agreement with BCI. The client is responsible for any fees and
charges incurred by the client from third parties as a result of maintaining the account such as
transaction fees for any securities transactions executed and account maintenance or custodial
fees. Thereafter, the client may terminate advisory services upon written notice delivered to and
received by BCI. Clients who terminate investment advisory services during a month are

charged a prorated advisory fee based on the date of BCI’s receipt of client’s written notice to
terminate. Any earned but unpaid fees are immediately due and payable.

Financial Planning – Financial planning services are charged in arrears through a fixed fee or
hourly arrangement as agreed upon between the client and Blue Capital, Inc. There will never be
an instance where $500 or more in fees is charged six or more months in advance. Hourly fees
are generally charged when the scope of services cannot be determined or if the services are
limited to one meeting. Fixed fees are generally quoted to the client for longer term consulting
projects. Fees are negotiable and vary depending upon the complexity of the client situation and
services to be provided. Hourly fees range from $100 - $250 per hour, depending on what is
negotiated between BCI and the client. Similar financial planning services may be available
elsewhere for a lower cost to the client. Fixed fees for longer-term consulting projects range
from $1,000 to $5,000 per project. An estimate for total hours and charges is determined at the
start of the advisory relationship.

Financial Planning Retainer Services – The Financial Planning retainer is mutually agreed upon
at the onset of this service. The flat fee is typically based on the complexity of the client’s
situation, net worth, number of accounts, amount of assets, allocation complexity, the expected
time required during the year, and the particular services we will provide to address the client’s
unique financial situation. There is an on-going retainer fee of up to $500 at the discretion of the
firm. The on-going fee is paid monthly in advance. There will never be an instance where $500 or
more in fees is charged six or more months in advance. Similar financial planning services may be
available elsewhere for a lower cost to the client. The Client acknowledges that the retainer
services are for advisement only. The Client shall retain full discretion to supervise, manage and
direct assets of the Client that may be held by a separate agreement between the Client and the
Custodian. The Client is free to implement or ignore any recommendations and/or advice provided
by Advisor.

Typically, clients will be invoiced monthly for all time spent by BCI as agreed upon by client or
upon completion of the services if less than a month. Clients who wish to terminate the planning
process prior to completion may do so with written notice. The client may obtain a refund of a
pre-paid fee if the advisory contract is terminated before the end of the billing period by
contacting Jay Molina at (402) 932-0131. Upon receipt of written notification, any earned fee
will immediately become due and payable. A client may terminate an advisory agreement
without being assessed any fees or expenses within five (5) days of its signing.

Additional Fees and Expenses

In addition to advisory fees paid to BCI as explained above, clients may pay custodial service,
...

Types of Clients

BCI offers investment advisory services to individuals. There is no minimum account size to
open and maintain an advisory account.

Form ADV, Part 2A, Item 8

         Methods of Analysis, Investment Strategies, and Risk of Loss

BCI’s methods of analysis and investment strategies incorporate the client’s needs and
investment objectives, time horizon, and risk tolerance. BCI is not bound to a specific
investment strategy for the management of investment portfolios, but rather consider the risk
tolerance levels pre-determined gathered at the account opening, as well as on an on-going basis.
Examples of methodologies that our investment strategies may incorporate include:

Asset Allocation – Asset Allocation is a broad term used to define the process of selecting a mix

of asset classes and the efficient allocation of capital to those assets by matching rates of return
to a specified and quantifiable tolerance for risk.
Dollar-Cost Averaging – Dollar-cost averaging is the technique of buying a fixed dollar amount
of securities at regularly scheduled intervals, regardless of the price per share. This will
gradually, over time, decrease the average share price of the security. Dollar-cost averaging
lessens the risk of investing a large amount in a single investment at the wrong time.

Technical Analysis – involves studying past price patterns and trends in the financial markets to
predict the direction of both the overall market and specific stocks.

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.

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.

Our strategies and investments may have unique and significant tax implications. Regardless of
your account size or other factors, we strongly recommend that you continuously consult with a
tax professional prior to and throughout the investing of your assets.

Investing in securities involves risk of loss that clients should be prepared to bear. Although we
manage your portfolio with strategies and in a manner consistent with your risk tolerances, there
can be no guarantee that our efforts will be successful. You should be prepared to bear the risk of
loss.

Investing inherently involves risk up to and including loss of the principal sum. Further, past
performance of any security is not necessarily indicative of future results. Therefore, future
performance of any specific investment or investment strategy based on past performance
should not be assumed as a guarantee. The Firm does not provide any representation or
guarantee that the financial goals of clients will be achieved.

The potential return or gain and potential risk or loss of an investment varies, generally
speaking, with the type of product invested in. Below is an overview of the types of products
available on the market and the associated risks of each:

General Risks. Investing in securities always 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 tops 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 can or will be met. Past performance is in no way an
indication of future performance. We also cannot assure that third parties will satisfy their
obligations in a timely manner or perform as expected or marketed.

General Market Risk. Investment returns will fluctuate based upon changes in the value of the
portfolio securities. Certain securities held may be worth less than the price originally paid for
them, or less than they were worth at an earlier time.

Common Stocks. Investments in common stocks, both directly and indirectly through
investment in shares of ETFs, may fluctuate in value in response to many factors, including, but
not limited to, the activities of the individual companies, general market and economic

conditions, interest rates, and specific industry changes. Such price fluctuations subject certain
strategies to potential losses. During temporary or extended bear markets, the value of common
stocks will decline, which could also result in losses for each strategy.

Portfolio Turnover Risk. High rates of portfolio turnover could lower performance of an
investment strategy due to increased costs and may result in the realization of capital gains. If
an investment strategy realizes capital gains when it sells its portfolio investments, it will
increase taxable distributions to you. High rates of portfolio turnover in a given year would
likely result in short-term capital gains and under current tax law you would be taxed on short-
term capital gains at ordinary income tax rates, if held in a taxable account.

Non-Diversified Strategy Risk. Some investment strategies may be non-diversified (e.g.,
investing a greater percentage of portfolio assets in a particular issuer and owning fewer
securities than a diversified strategy). Accordingly, each such strategy is subject to the risk that
a large loss in an individual issuer will cause a greater loss than it would if the strategy held a
larger number of securities or smaller positions sizes.

Model Risk. Financial and economic data series are subject to regime shifts, meaning past
information may lack value under future market conditions. Models are based upon
assumptions that may prove invalid or incorrect under many market environments. We may
use certain model outputs to help identify market opportunities and/or to make certain asset
allocation decisions. There is no guarantee any model will work under all market conditions.
...