Prescott Group Capital Management LLC

Item 5.     Fees and Compensation
     Our firm receives compensation from our private fund investors based both on the
     percentage of assets we manage and on performance achieved for investor
     accounts. We generally charge each of our investors an annual asset-based
     administrative service allocation equal to 1% of each of their investor capital
     accounts. In any fiscal year where net profits (taxable income for the Aggressive
     Mid Cap Fund) before performance allocation (described below) do not exist, the
     administrative service allocation is accrued but not deducted from each investor’s
     capital accounts until net profits (taxable income for the Aggressive Mid Cap Fund)
     after the administrative service allocation but before performance allocation do
     exist. Any investor who retires from a client will have its capital account reduced
     by its proportionate share of any deferred administrative service allocation unless
     we required the retirement of the investor in our discretion.

     We also charge private fund investors a performance-based profit allocation equal
     to 20% of the investors’ returns (realized and unrealized) in excess of the
     hypothetical return which would have been realized by investors in an investment
     based on the percentage change in the price level of the comparable index (Russell
     2000 for Small Cap Funds, S&P 500 for Large Cap Fund, and S&P Mid Cap 400
     for Aggressive Mid Cap Fund) subject to a "loss carryforward" limitation. This
     means that we only receive a performance profit allocation when an investor's
     account value for the year has recovered any underperformance from the previous
     year.

     Certain employees and immediate family members invested in our private funds do
     not pay the above allocations, but the allocations are not negotiable by non-related
     parties.

     We deduct the asset-based fee described above from each investor's capital account
     at the beginning of each month. We deduct the performance-based compensation
     referenced above from each investor's capital account at the end of each calendar
     year, and/or on the amount of any withdrawal prior to year end. Since investors in
     our clients are only allowed to withdraw capital at the end of a quarter (or monthly
     in our discretion) there are never prepaid fees to refund.

     In connection with our advisory services, our clients, and consequently the
     investors in our clients, do not bear organizational and operational expenses, but do
     bear all of their directly related investment expenses such as those listed below.
     The list details some of these expenses, but does not include every possible expense
     our clients may incur:

            ●       interest and commitment fees on loans and debit balances,

            ●       brokerage commissions,

            ●       custodial fees, trade processing fees, including clearing and
                    settlement charges, and

            ●       proxy expenses, cost of any outside appraisers, accountants,
                    attorneys or other experts or consultants engaged in connection
                    with specific transactions.

     For more information on brokerage transactions and costs, please see Item 12:

Item 7.     Types of Clients

     Prescott provides investment management services to four private fund clients
     which are pooled investment vehicles (see Item 4). The underlying investors in our
     clients typically consist of:

            ●       Individuals,

            ●       Trusts, estates and foundations, and

            ●       Corporations, partnerships or other business entities.

     Prescott also provides investment advisory services and limited investment
     management services to a charitable organization client.

     All our private fund clients rely on certain exclusions from the definition of
     “investment company” in the Investment Company Act of 1940, as amended.
     Accordingly, none of our clients are registered as investment companies with the
     United States Securities and Exchange Commission.

     Investment Requirements

     We require a minimum initial investment of $400,000 in the Small Cap Funds and
     Aggressive Mid Cap Fund and a minimum additional investment of $25,000,
     although we may in our discretion accept investments in lesser amounts. We no
     longer accept new or additional investments for the Large Cap Fund. Our private
     fund clients only accept high-net-worth investors, defined generally for this
     purpose as investors with at least $2.2 million of net worth, exclusive of personal
     residence ($5.0 million in investments for Prescott Group Aggressive Small Cap II,
     L.P.).

     This firm brochure is not an offer to invest in our clients.