Donoghue Forlines LLC

ITEM 5: FEES AND COMPENSATION

DISCRETIONARY MANAGED ACCOUNTS

We offer our services on a discretionary basis to select clients on both a fee and non-fee basis. The advisory
fees are deducted from the client’s account. The specific manner in which advisory fees are charged is
established in the client’s investment advisory agreement with the Company. Generally, the annual fee for
accounts is 1.00% of assets under management. Fees are generally non-negotiable.

Fees are payable quarterly in arrears and are based on the average daily balance, including cash and cash

equivalents, of each account. Clients will, in general, pay fees and charges for custodian services in addition
to management fees, as well as brokerage commissions for purchases and sales of securities. See Item 12,
Brokerage Practices. Where fees are payable in advance clients who withdraw assets during a quarter may
obtain a pro rata refund based on the number of days in the quarter the assets remained under management.

A client may cancel the client’s investment advisory agreement by providing the Company with 30 days’ prior
written notice executed by all owners of the account. The account can be liquidated or transferred in less than
30 days, however, the notice period will serve as the basis for the computation of any pro rata refund due on
any unused portion of the prepaid quarterly management fee.

Clients should be aware that advisers to mutual funds and ETFs, the shares of which are held in client accounts,
debit the funds’ assets for advisory and other fees and expenses. These fees and expenses are in addition to
the fees and expenses described above to which client accounts are subject. If a prospective client purchases
shares directly from the mutual fund and does not include the shares in the account managed by the Company,
the client will not pay an account management fee to the Company with respect to that investment.

The Company is the investment adviser to Funds, listed above, which may be held in client accounts or variable
annuity contracts or insurance policies owned by clients, respectively. This presents a conflict of interest
because the Company’s investment adviser representatives may be incentivized to recommend Funds advised
by the Company based on the compensation received, rather than on a client’s needs. The Company may also
be incentivized to include mutual funds advised by the Company from whose investment adviser the Company
receives compensation through joint marketing or other arrangements to the extent that doing so would
increase the Company’s revenue. Clients who have shares of Donoghue Forlines Funds in their accounts will
have the management fees for those accounts adjusted downward in an attempt to eliminate fee duplication
and mitigate conflicts of interest.

Conditions for Managing Accounts: The minimum amount required to establish a managed account with
Donoghue Forlines is generally $25,000 for all dynamic asset allocation account portfolios and $50,000 for
all index portfolios. The Company may, however, accept accounts that are opened with less than the minimum
amount, such as an Individual Retirement Account, if the client has opened at least one account that meets the
minimum requirement. In addition, accounts under the minimum may be accepted on an individual basis at
the discretion of the Company.

NON-DISCRETIONARY MANAGED ACCOUNTS

We also offer our services to Platforms on a non-discretionary/advised basis, wherein we provide our model
portfolios and associated trading signals to the Platforms, and investment advisers and broker-dealers invest
their clients’ assets using our model portfolios. Fees for Platforms using the Company’s models range from 0
– 50 basis points. In limited circumstances where the Company provides additional services (e.g., trading), the
Company will receive additional fees as negotiated with the platform provider, investment adviser or broker-
dealer.

In these instances, the Company is compensated by the Platforms, and investment advisers and broker-dealers.
The fees and expenses paid by investors whose financial professionals utilize our model portfolios and
associated trading signals are documented in the client’s agreement with their financial professional.

The Company is the investment adviser to Funds, which are described in greater detail in Item 4, which may
be held in investor accounts managed by financial advisors. This presents a conflict of interest because the
Company’s investment adviser representatives may be incentivized to recommend the Funds advised by the
Company based on the compensation received, rather than on a financial adviser’s client’s needs. The
Company’s Investment Team may also be incentivized to include mutual funds advised by the Company or
from whose investment adviser the Company receives compensation through joint marketing or other
arrangements to the extent that doing so would increase the Company’s revenue. The Company takes the use

of mutual funds or ETFs that it advises, or from whose investment manager it receives other compensation
into account in establishing the fee that it charges Platforms, registered investment advisers and broker-dealers
for access to its model portfolios and associated trading signals in an attempt to eliminate fee duplication and
mitigate conflicts of interest.

MUTUAL FUNDS, ETFS, AND VIT FUNDS

The Company serves as investment adviser to mutual funds, ETFs and VIT Funds which are listed in Item 4.
Generally, the annual fee for the Funds that we advise range from 0.65 to 1.00% of fund net assets. The annual
fee is calculated by a third party and is deducted by such third party from the mutual fund’s account and paid
to the Company on a monthly basis, in arrears.

Investors in the mutual funds that we advise are subject to certain other fund expenses (including with respect
to any fund that invests in other funds, the fees and expenses incurred by underlying funds (also known as
...

ITEM 7: TYPES OF CLIENTS

We provide investment advisory services to individuals (including high net worth individuals), mutual funds,
variable insurance trust funds, ETFs, pension and profit-sharing plans, charitable organizations and
corporations and other business entities. In addition, we supply other financial professionals and platforms
with model portfolios and related trading signals used in the management of their client accounts.