R Squared BM LLC

Item 5. Fees and Compensation
Ducenta charges asset-based fees, fixed fees, and performance fees for various clients (which
clients can include, among others, retail and institutional investors’ separately managed
accounts and private funds), as more fully discussed herein. These fees are negotiable and
can vary depending on the investment strategy, the product type, the size of the specific
client account, and the nature and level of services we provide.

The asset-based fees can generally range up to 0.55% (55 basis points) of assets under
management in the client account. Our minimum account size for institutional investors is
$1,000,000, our minimum account sizes for private wealth strategies will vary from
$300,000 for Core and Core Plus to $500,000 for High Yield, and our minimum account sizes
for other retail accounts is $250,000; however, the firm may make exceptions to this general
policy regarding minimum account sizes. Additionally, private wealth strategies have an
annual minimum fee of $2,500 for Core or Core Plus and an annual minimum fee of $3,000
for High Yield. We may aggregate certain related client accounts to determine if the minimum
account size has been met and to determine the applicable fee. Asset-based fees are
calculated using the aggregate fair value of the client’s portfolio as set forth in each
agreement between us and a client (each such agreement, the “Client Agreement”).

The Client Agreement establishes the structure and amount of any fees charged to the
applicable client account. We will typically be compensated on a quarterly basis in arrears,
although in certain cases we may be paid on a different schedule, such as monthly in arrears
or quarterly in advance. Clients may elect to be invoiced for fees or authorize us to directly
withdraw fees from the applicable custodial account. We will charge a prorated fee to
accounts that are initiated or terminated during the applicable period (which prorated fee
will be a percentage of the standard client fee for that account calculated based on the
number of days the client account is open during the relevant period (i.e., monthly or
quarterly)). Typically, asset-based fees will be prorated for separately managed account
contributions and withdrawals made during the applicable period (with the exception of de
minimis contributions and withdrawals). Except as otherwise provided in a Client
Agreement, upon termination of any account, any earned, unpaid fees will be due and
payable to the firm, and any pre-paid unearned fees will be refunded to the client within a
reasonable time.

Clients will also incur charges imposed by third parties, which could include investment
management fees, custodial fees, wire transfer and electronic fund fees, transfer taxes,
deferred sales charges, odd-lot differentials, transaction charges imposed by the broker-
dealer executing securities transactions for the client’s account, other fees and taxes on
securities transactions and brokerage accounts, and fees and expenses imposed directly by
any funds held in or for the client’s account. For further discussion of our brokerage
practices, please see Item 12 below. Management fees paid to us are separate and distinct
from the fees and expenses charged directly by the client’s custodian, the broker-dealer, and
other funds. Private fund clients will bear all of their fees and expenses including, without
limitation, fund accounting, audit fees, insurance, legal fees, custody and brokerage costs.
The fees and expenses imposed by other funds are described in each fund’s prospectus.
                                              6                       Ducenta Squared Asset Management
                                                                                      Part 2A of Form ADV
                                                                                       Disclosure Brochure

These fees will generally include an advisory or management fee, other fund expenses, and a
possible distribution fee. If the fund also imposes sales charges, a client may pay an initial or
deferred sales charge. Uninvested cash in a client’s account may be swept into a money
market fund by the client’s custodian at the client’s discretion. The client should review both
the fees charged by the funds and the fees we charge to fully understand the total amount of
fees to be paid by the client and to evaluate the investment management services provided.
We will not receive any portion of these third-party commissions, fees, and costs. Please see
Item 12 below for benefits that may accrue to the adviser and its clients.

Item 7. Types of Clients
We offer investment advice to individuals, high net worth individuals, trust programs,
corporations and other businesses, state or municipal government entities, pension and
profit-sharing plans, Taft-Hartley and other Employee Retirement Income Security Act of
1974 (“ERISA”) plans, financial intermediaries, insurance companies, charitable
organizations, foundations, endowments, other investment advisers, pooled investment
vehicles, registered funds, and other entities. Minimum account sizes and minimum fees will
apply for certain strategies. Please refer to Item5 above for more information.

To the extent we manage client accounts that are covered by ERISA or that are tax-qualified
retirement plans, including individual retirement accounts (“IRAs”), we acknowledge that
we are a fiduciary as defined under Section 3(21) of ERISA and Section 4975(e)(3) of the
Internal Revenue Code of 1986 with respect to the services provided under the applicable
Client Agreement.