Portfolio Design Labs LLC

ITEM 7. TYPES OF CLIENTS                               MATERIAL RISKS

PDL’s clients include, but are not limited to,         Investing in securities involves the risk of loss
individuals, high-net-worth individuals, pension       that clients should be prepared to bear.
and profit-sharing plans, retirement accounts,         Investment performance cannot be predicted or
partnerships, trusts, and other investment             guaranteed, and the value of a client’s assets will
managers.                                              fluctuate due to market conditions and other
                                                       factors. Investments are subject to various risks,
The minimum account size for DOTS accounts is          including, but not limited to, economic, political,
$500,000 across the household, which may               market, currency, liquidity, and cybersecurity
include multiple accounts. The minimum account         risks, and will not necessarily be profitable. Past
size for Thematic and Direct Index accounts is         performance is not indicative of future
$250,000. PDL has the discretion to waive              performance.
account minimum requirements.

Portfolio Labs Disclosure Brochure                                                        Page 10 of 15

Quantitative Analysis Risk                              client account to the Internal Revenue Service or
                                                        other taxing authorities. Regulatory changes and
Investment strategies based on the application of       restrictions imposed by regulators, self-
quantitative analysis may perform differently           regulatory organizations and exchanges vary
than expected as a result, among other things,          from country to country and may affect the value
the factors used in the model, the weight placed        of client investments and their ability to pursue
on each factor, changes from the factors’               their investment strategies. Any such rules,
historical trends, and technical issues arising from    regulations and other changes, and any
the construction and implementation of the              uncertainty in respect of their implementation,
models.                                                 may result in increased costs, reduced profit
                                                        margins and reduced investment and trading
Target Rate of Return Risk                              opportunities, all of which would negatively
Certain PDL investment strategies seek to achieve       impact performance.
a minimum rate of return over a period of at least
                                                        Data and Information Risk
ten years. There can be no assurance that any
portfolio implementing such strategies will             Although PDL obtains data and information from
achieve its target rate of return.                      third party sources that it considers to be reliable,
                                                        PDL does not warrant or guarantee the accuracy
Market/Volatility Risk
                                                        and/or completeness of any data or information
                                                        provided by these sources. PDL does not make
The risk that the value of the assets in which a
                                                        any express or implied warranties of any kind
client account is invested decreases (potentially
                                                        with respect to such data. PDL shall not have any
significantly) in response to various factors,
                                                        liability for any errors or omissions in connection
including inflation (or expectations for inflation),
                                                        with any data provided by third party sources.
deflation(or expectations), market instability,
regulatory events, changes in interest rates,           Equity Risk
regional or global pandemics, and national and
international political and economic events due to      Common and preferred stock represents equity
increasingly interconnected global economies and        ownership in a company. Stock markets are
financial markets.                                      volatile. The price of equity securities will
                                                        fluctuate and can decline and reduce the value of
Pandemics and Other Diseases Risk
                                                        an equity’s investment portfolio. The value of
                                                        equity securities purchased could decline if the
Events such as pandemics or widespread
                                                        financial condition of the companies in which PDL
outbreaks of disease may lead to increased short-
                                                        invests declines or if overall market and economic
term market volatility and may have adverse
                                                        conditions deteriorate. They may decline due to
long-term effects on the U.S. and world
                                                        factors that affect a particular industry or
economies and markets generally. Pandemics
                                                        industries, such as labor shortages or an increase
and similar events could have an acute effect on
                                                        in production costs and competitive conditions
individual issuers or related groups of issuers and
                                                        within an industry, or due to general market
could adversely impact securities markets,
                                                        conditions that are not specifically related to a
interest rates, auctions, secondary trading,
...