Cape Ann Capital Inc

ITEM 5: FEES AND COMPENSATION

Description
Our asset management fees are based on the market value of the assets being managed
and are calculated according to the following fee schedule.

                                     Fee Schedule

                  Assets                     Annual Fee Rate

                  First $1 million           0.80% of assets
                  Over $1 million            0.20% of assets

Cape Ann Capital’s minimum fee is $300 per month. Accounts below $450,000 in assets
pay a higher annual fee rate than the 0.80% shown above. Clients using custodians that
do not link electronically to Orion (our portfolio reporting software) will be charged
0.90% of assets on the first $1 million. Cape Ann Capital charges a $500 set up fee in
cases where our initial setup work is more than ten hours of labor.

Cape Ann Capital’s annual financial planning fees are $3,000.

Fees are negotiable.

Fee Billing
In most cases, Cape Ann Capital invoices fees monthly (at one-twelfth the annual rate), in
arrears based on month-end valuations. Fees for the first month are pro-rated from the
first day assets arrive at Fidelity. Cape Ann Capital submits fee invoices to Fidelity.
Fidelity debits our monthly fee directly from client accounts.

The fee billing arrangements in the open architecture qualified plans vary from plan to
plan. In some cases, the record keeper calculates and collects our fee. In other cases, the
plan sponsor pays us directly.

Other Expenses
Cape Ann Capital uses Fidelity for most custody and discount brokerage. Clients may
incur brokerage and other transaction costs. Further information on brokerage fees is
provided at Item 12 in this brochure.

Firm Brochure–Part 2A of Form ADV              6                December 31, 2025

All mutual funds have internal operating expenses, which are debited from the fund and
therefore paid by the client. These fees are in addition to the fees charged by Cape Ann
Capital.

Most mutual funds offer transaction fee (TF) shares and no-transaction-fee (NTF) shares.
As a fiduciary it is our responsibility to buy the share class which is in the best interest of
each client. For every purchase we must decide if it is worth paying a one-time
commission to obtain a higher rate of return. The math dramatically favors NTF shares
for investors with funding programs that make numerous small purchases. It makes no
sense to pay $20 every month to invest $100. On the other hand, investors making large
purchases are much better off paying $20 to get a higher rate of return for as long as they
hold the fund. The increased return, from avoiding the 12b-1 distribution fee included in
NTF shares, is typically 0.25% per year. For a million-dollar investment this amounts to a
$2,500/year value which compounds over time. Since this higher return is simply an
expense reduction it comes without risk. Cape Ann Capital configures its systems to buy
the share class that will likely lead to the highest wealth accumulation for the client. But
this is a complicated and imprecise calculation which for most of our buy decisions is no
longer necessary because of a game-changing innovation by Fidelity. At Fidelity we can
buy the higher return share class without a commission. Fidelity has used its clout in the
marketplace to get many mutual fund companies to absorb this cost.

Participation or Interest in Client Transaction
Cape Ann Capital receives no compensation for the sale of securities or other investment
products and therefore has no incentive to select one investment over another.

ITEM 7: TYPES OF CLIENTS

Cape Ann Capital provides investment advisory services to:

   •   high net worth individuals,
   •   individuals,
   •   qualified plans,
   •   trusts,
   •   corporations, and
   •   charities.

Generally, Cape Ann Capital does not require a minimum account size (though it does
enforce a minimum monthly fee of $300, as mentioned in Item 5)

Firm Brochure–Part 2A of Form ADV               7                  December 31, 2025