Premium 72 Capital LLC

Fees and Compensation.

ITEM 7 – METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

In managing clients’ accounts and providing recommendations to discretionary and non-discretionary
clients, The Firm uses various investment strategies and methods of analysis, as described below. This
section also contains a discussion of the primary risks associated with these investment strategies.
However, it is not possible to identify all the risks associated with investing. The risks applicable to an
account will depend on the nature of the account, its investment strategy or strategies, and the types of
securities held by the account. Similarly, the risks applicable to, and associated with, your accounts,
depend on your asset allocation, including the nature of the accounts, the investment strategies, and
types of securities held by the accounts.

While The Firm seeks to manage your accounts so that risks are appropriate to the return potential for
the strategy, it is often not possible or desirable to fully mitigate risks. Any investment includes the risk
of loss and there can be no guarantee that a level of return will be achieved. Clients should understand
that they could lose some or all of their investment and should be prepared to bear the risk of such
potential losses, including through diversification.

Clients should be aware that while The Firm does not limit its advice to particular types of investments,
mandates are sometimes limited to certain types of securities (e.g., equity securities) and thus are not
diversified. We expect that the assets we manage do not represent all of a client's assets. You are
responsible for appropriately diversifying your assets to guard against the risk of loss in any one asset
type.

       1. Analysis Methods

The Firm ’s IARs use various methods of analysis and investment strategies. Methods and strategies will
vary based on the IAR providing advice. Models and strategies used by one IAR will be different than the
strategies used by other IARs. Some IARs use just one method or strategy while other IARs rely on
multiple. The Firm does not require or mandate a particular investment strategy to be implemented by
its IARs. Further, The Firm has no requirements for using a particular analysis method and IARs are
provided flexibility (subject to The Firm supervision and compliance requirements) when developing their
investment strategies. Security analysis methods utilized by The Firm include the following:

             a. Charting
Charting analysis seeks to identify resistance and support reference prices for decisions to buy (price hits
the support) or sell (price hits the resistance). Through charting, the analysis seeks to identify price
patterns and market trends in financial markets. Charting can be applied to long-term investing or can
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be used as a market-timing strategy, depending on the timeframe of the price charts.

             b. Fundamental
Fundamental analysis maintains that markets misprice securities in the short run, but that the correct
price will eventually be reached by the market. The fundamental analysis of a business involves analyzing
financial statements, management, and competitive advantages, and competitors and markets. When
applied to futures and forex, fundamental analysis focuses on the overall state of the economy, interest
rates, production, earnings, and management.

             c. Technical
Technical analysis maintains that all information is already reflected in the stock price. Technical analysis
is a discipline for forecasting the direction of prices through the study of past market data, primarily price
and volume. Generally, technical analysis employs models and trading rules based on price and volume
transformations, such as the relative strength index, moving averages, regressions, inter-market, and
intra-market price correlations, business cycles, stock market cycles, or, classically, through recognition
of chart patterns.

             d. Volatility
Volatility analysis involves the analysis of price fluctuations due to increasing or decreasing
market/underlying volatility.

             e. Cyclical
Cyclical analysis generally targets cyclical stocks for purchase of equity securities when the ratio of price-
to-earnings (P/E Ratio) is low and sell them when the P/E Ratio is high (i.e., when earnings are peaking).
The P/E Ratio is a measure of the price paid for a share relative to the annual net income or profit earned
by the Firm per share.

       2. Sources of Information

The main sources of information used in The Firm ’s analysis:
       •      Financial newspapers and magazines
       •      Inspections of corporate activities
       •      Research materials prepared by others
       •      Corporate rating services
       •      Timing services
       •      Annual reports, prospectuses, filings with the SEC
       •      Company press releases

       3. Investment Strategies

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The Firm investment strategies used to implement investment advice:
        •      Long term Purchases (securities held at least a year)
        •      Short term purchases (securities sold within a year)

The Firm ’s IARs use various investment strategies depending on the objectives stated by the client during
consultations and will vary based on the IAR providing advice. Models and strategies used by one IAR will
be different than the strategies used by other IARs. Some IARs use just one investment strategy while
other IARs rely on multiple. The Firm does not require or mandate a particular investment strategy to be
implemented by its IARs.

An example of one of the investment strategies used for client accounts is asset allocation, utilizing a
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