Capstone Wealth Management Inc

Fees and Compensation
Financial Planning Services Fees
We charge $300 per hour for our General Financial Planning Services. This hourly fee is
negotiable based upon the size and scope of the financial planning project. We may charge a
minimum fee of $300 if we provide you with research or advice via phone communications.

For ongoing services, Capstone Wealth will prepare and deliver an invoice at the beginning of the
quarter detailing the number of hours Capstone Wealth spent on your financial planning needs in
the previous quarter. For one-time services, Capstone Wealth will deliver an invoice upon
completion of the financial planning project. Fees are due and payable within 10 days from the
date of the invoice.

If you are receiving wealth management services and the value of your investment portfolio(s) is
more than $1 million, we will provide financial planning at no additional charge.

Financial Planning Services for Business Owners and Professional Executives Fees
The fee for our Financial Planning Services for Business Owners and Professional Executives is
$2,500.00 per quarter. Fees are due and payable within 10 days from the date of our invoice.
This fee is charged in advance. The fee for the initial quarter will be prorated based upon the
number of calendar days left in the calendar quarter from the date the service agreement is
signed.

Should either one of us terminate the service agreement before the end of a billing period, any
unearned fees deducted from your account will be returned, calculated as follows:

                           Quarterly Fee      Agreement        # of Unearned
    Billing Period                                                                   Calculated Fee to be Returned
                          Paid in Advance   Termination Date       Days
     2nd Quarter
  April 1st – June 30th     $2,500.00          April 23             67         ($2,500.00/91 = $13.47) X 67 = $1,840.49
        91 days

Wealth Management Services Fees
We are compensated for our Wealth Management Services based upon a percentage of the
market value of all assets in the client’s account(s) on the last trading day of each calendar
quarter.

Broker-dealers and other financial institutions that hold client accounts are referred to as
custodians (hereinafter “broker-dealer/custodian”). The broker-dealer/custodian determines the
values of the investment assets in your account.

Our fees are payable quarterly in advance. We obtain written authorization from you to instruct
the broker-dealer/custodian to withdraw fees directly from your account. We will send you an
invoice detailing the quarterly fee before or at the same time we instruct the custodian to
withdraw fees from your account.

Fees for the initial quarter are assessed upon the value of the investments in your account on the
date the broker-dealer/custodian receives the majority of the assets. Those fees are prorated
based upon the number of days left in the calendar quarter from the date you signed the service
agreement. Our fee schedule is described below:
                     Assets Under Management                             Advisory Fee1
               First $249,999                                                2.00%
               Next $250,000 - $499,999                                      1.50%
               Next $500,000 - $999,999                                      1.20%
               Next $1,000,000 - $2,499,999                                  0.90%
               Next $2,500,000 - $4,999,999                                  0.75%
               Next $5,000,000 and above                                     0.55%

              Fees are negotiable at our sole discretion.

How our fee is calculated (based upon a portfolio with a market value of $4,000,000 on the last
trading day of the quarter):

                 Tiered Fee                                         Quarterly Fee Assessed/Tier
  First $249,999                             2.00%        [$249,999 X .020 = $5,000.00]/4                     $1,250.00
  Next $250,000 - $499,999                   1.50%        [$249,999 X .015 = $3,750.00]/4                       $937.50
  Next $500,000 - $999,999                   1.20%        [$499,999 X .012 = $6,000.00]/4                     $1,500.00
  Next $1,000,000 - $2,499,999               0.90%        [$1,499,999 X .009 = $13,500.00]/4                  $3,375.00
  Next $2,500,000 - $4,999,999               0.75%        [$1,500,004 X .0075 = $11,250.00]/4                 $2,812.50
                                                                     Total Fee for the Quarter:               $9,875.00

Your broker-dealer/custodian will provide you with statements that show the amount of the fees
paid directly to us. You should review those statements and verify the calculation of our fees.
The broker-dealer/custodian does not verify the accuracy of the fee calculations.

You may cancel any of our service agreements without any fees due or penalty, within five (5)
business days of signing the agreement. If cancellation occurs thereafter, you are responsible
only for fees and expenses incurred to that point.

The fee our Wealth Management Services is payable in advance. Should either one of us
terminate the investment advisory agreement before the end of a billing period, any unearned
fees deducted from your account will be returned. Using the example above, the amount
refunded to you is calculated as follows:

                             Quarterly Fee Paid   Agreement Termination   # of Unearned
       Billing Period                                                                       Calculated Fee to be Returned
                                in Advance                Date                Days
        2nd Quarter
                                                                                          ($9,875.00/91 = 108.52) X 67 =
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Types of Clients
Capstone Wealth provides investment advisory services primarily to individuals and high net
worth individuals, including their trusts, estates, and retirement accounts.

Methods of Analysis, Investment Strategies and Risk of Loss
Using your IPS, Capstone Wealth will strategically allocate and diversify your portfolio across
various asset classes and broad sectors of the market using mutual funds. Our mutual fund
manager selection is thoughtful and thorough. We research and vet managers against industry,
firm, and client data for appropriateness and suitability. We take a disciplined approach combining
past and present data while acknowledging future performance is unknown. Where others would
use forecasts, relationships, or emotions to guide their decisions, we substitute facts, logic, and
reason.

We also use fixed income investments like corporate bonds and U.S. Treasuries. In selecting
fixed income investments for the portfolio, we assess a variety of factors including credit quality,
current and forecasted interest rates, relative currency value, cash flows and current overall
economic conditions.

It is important to understand investing in general involves risk of loss that you
                          should be prepared to bear.

Along with the obvious risk of loss of principal, there are several significant risks your investment
portfolio will be subjected to. These risks include, but are not limited to:

●Inflation Risk: The investment value may not keep pace with inflation. If the after-tax
return on an investment is less than the rate of inflation, the value of the investment will
decline.

●Equity Investing Risks: Equity risk is the risk that the value of equity securities will fall due
to general market or economic conditions (market risk), perceptions of the industry (industry
risk), or company specific circumstances (business risk).

●Fixed Income Investing Risks: Fixed income investment value may fall due to interest
rate movement (interest rate risk) and a specific issuer’s inability to pay its obligations (interest
and principal payments) due to unforeseen circumstances (credit risk).

●Global Investing Risks: The mutual funds Capstone Wealth may transact in a portfolio may
invest in the global market. If so the fund may be subject to the following additional risks:

   Country Risk The possibility that political events (war, national elections), financial problems
   (rising inflation, government default), or natural disasters (earthquake, poor harvest) will weaken a
   country’s economy and cause investments in that country to decline.

   Currency Risk The possibility that returns could be reduced for Americans investing in foreign
   securities because of a rise in the value of the U.S. dollar against foreign currencies. Also called
   exchange-rate risk.

   Foreign Market Exchanges Certain events may affect foreign market exchanges that may result in
   the inability to quickly sell foreign securities traded on that exchange (the security will become illiquid).

SPECIFIC RISKS ASSOCIATED WITH OUR WEALTH MANAGEMENT SERVICES
Manager Risk. Clients rely on certain key personnel of Capstone Wealth, primarily portfolio
manager Mr. Thomas. Should Mr. Thomas become unable to perform portfolio management
duties for whatever reason, the performance of client accounts may be adversely affected.
Capstone Wealth has attempted to mitigate this risk in hiring additional key personnel and
investment adviser representatives.

Investment Strategy Risk. The primary risk associated with this method is manager risk (listed
above). Also, we “accept” the market return, which may or may not be more than what an
actively managed portfolio achieves.

Along with the obvious risk of principal, your investment portfolio will be exposed to some degree
to the specific security risks identified below. However, to reduce these risks and, as stated
above, our investment strategy focuses on allocating your portfolio across various asset classes
and diversifying the investments held in your portfolio. This strategy does not eliminate risk; it
may merely reduce it.

Specific Security Risk. Capstone Wealth will use mutual funds and fixed income securities,
generally held to maturity, in managing your investment portfolios. The specific risks of these
securities are described below. These investments (except Treasury Inflation Protected/Inflation
Linked Bonds) are not guaranteed or insured by the FDIC or any other government agency. Note
–Capstone Wealth may also retain individual stock positions in the portfolio and will monitor and
rebalance those positions as well.

SPECIFIC SECURITY RISK
Mutual Funds. Investing in mutual funds carries the risk of capital loss and thus you may lose
money investing in mutual funds. All mutual funds have fees and expenses, such as transaction
costs and investment adviser fees, that lower investment returns. There are many types of
mutual funds such as fixed income, equity, balanced, index, sector, specialty (those that focus
on specialized mandates such as real estate, commodities, socially responsible investing, etc.)
and fund-of funds.

Depending upon the type of mutual fund invested in, all mutual funds will be subject to the
general risks of investing noted above to some varying degree. Mutual funds can be passively or
actively managed. Passive management involves buying a portfolio of securities designed to
track the performance of a benchmark index. The fund’s holdings are only adjusted if there is an
adjustment in the components of the index. With active management, the fund’s portfolio
manager buys and sells investments, attempting to outperform the return of the overall market
or another identified benchmark. Actively managed mutual funds present “manager risk”; the
risk the investment adviser may fail to execute the fund’s investment strategy effectively
resulting in the failure of the stated objectives.
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