Shellman Investment Management LLC

Fees and Compensation – Item 5

  Portfolio Management Services
  For portfolio management services, Shellman Invest charges an annual fee based on a percentage of assets under
  management. Fees are based on the following fee schedule:

                Assets Under Management (in US Dollars)          Annual Advisory Fee
                First $1 million                                 1.2200%
                Next $1 million                                  0.98%
                Next $1 million                                  0.74%
                Over $3 million                                  0.5%

  Clients are encouraged to ask us about our fee calculator to receive an estimate of their annual fees.

  The exact fee payable by the client will be listed in the advisory agreement signed by the client and the firm.
  Associated Persons of the firm receive a 50% discount of advisory fees.

  Fees are payable quarterly in advance and are based on the value of assets on the last day of the previous quarter.
  Fees will be pro-rated for the first partial quarter. Fees are not adjusted for any deposits or withdrawals during
  the quarter. Portfolio management fees are not negotiable.

  Generally, the custodian holding the client’s account will deduct Shellman Invest’s fees and any other custodial
  fees directly from a designated account to facilitate billing provided the client has given written authorization.
  The qualified custodian will send an account statement at least quarterly. This statement will detail all account
  activity. Further, the Adviser manages client accounts whose assets can be custodied at different banks, even for
  the same client. In instances where the Adviser does not have the ability or authority to deduct the advisory fee
  from accounts held at certain custodians (“custodian A”) due to their respective policy and/or agreement, the
  Adviser will deduct its advisory fee pertaining to assets held at custodian A from the custodian with which such
  arrangement is possible (“custodian B”). In this manner, in some instances advisory fees will be deducted from a
  single designated client account to facilitate billing. Such arrangement is disclosed to and authorized by the client.

  Our annual fee is exclusive of, and in addition to brokerage commissions, transaction fees, and other related costs
  and expenses which will be incurred by the client. However, we will not receive any portion of the commissions,
  fees, and costs. Please see Item 12 – Brokerage Practices for further information on brokerage and transaction
  costs.

  You may terminate the portfolio management services agreement upon written notice to our firm. If you have
  pre-paid advisory fees that we have not yet earned, you will receive a prorated refund of those fees.

  Important notes regarding billing
  Billing on Cash Positions: The firm treats cash and cash equivalents as an asset class. Accordingly, unless otherwise
  agreed in writing, all cash and cash equivalent positions (e.g., money market funds, etc.) are included as part of
  assets under management for purposes of calculating the firm’s advisory fee. At any specific point in time,
  depending upon perceived or anticipated market conditions/events (there being no guarantee that such

Shellman Investment Management, LLC
Form ADV Part 2A Brochure

  anticipated market conditions/events will occur), the firm may maintain cash and/or cash equivalent positions for
  defensive, liquidity, or other purposes. While assets are maintained in cash or cash equivalents, such amounts
  could miss market advances and, depending upon current yields, at any point in time, the firm’s advisory fee could
  exceed the interest paid by the client’s cash or cash equivalent positions.

  Periods of Portfolio Inactivity: The firm has a fiduciary duty to provide services consistent with the client’s best
  interest. As part of its investment advisory services, the firm will review client portfolios on an ongoing basis to
  determine if any changes are necessary based upon various factors, including but not limited to investment
  performance, fund manager tenure, style drift, account additions/withdrawals, the client’s financial
  circumstances, and changes in the client’s investment objectives. Based upon these and other factors, there may
  be extended periods of time when the firm determines that changes to a client’s portfolio are neither necessary
  nor prudent. Notwithstanding, unless otherwise agreed in writing, the firm’s annual investment advisory fee will
  continue to apply during these periods, and there can be no assurance that investment decisions made by the
  firm will be profitable or equal any specific performance level(s).

  Additional Fees and Expenses
  As part of our investment advisory services to you, we will invest in mutual funds, exchange traded funds and
  other international investment company security equivalents (“funds”). The fees that you pay to our firm for
  investment advisory services are separate and distinct from the fees and expenses charged by these funds
  (described in each fund’s prospectus) to their shareholders. These fees will generally include an advisory fee and
  other fund expenses.

  You will also incur custodial fees, transaction charges and/or brokerage fees when purchasing or selling securities.
  These charges and fees are typically imposed by the broker-dealer or custodian through which your account
  transactions are executed. We do not share in any portion of the fees or charges imposed by the broker-dealer
  or custodian. Where suitable, we will recommend no-load mutual funds. To fully understand the total cost you
  will incur, you should review all the fees charged by the funds, our firm, and others. For information on our
  brokerage practices, please refer to the “Brokerage Practices” section of this Disclosure Brochure.
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Types of Clients – Item 7

  We offer investment advisory services to individuals, high net worth individuals, trusts, estates, corporations, or
  other business entities.

  Generally, we require a minimum of $100,000 to establish an advisory relationship. At our sole discretion we may
  waive this requirement.

                        Methods of Analysis, Investment Strategies and Risk of Loss – Item 8

  We believe that long term asset allocation is the primary driver of portfolio return. We use annual information
  provided by JP Morgan in its annual Long Term Capital Markets Expectations report as a basis for our decisions,.
  We use the information provided based on its long-term track record, breadth of coverage and detail provided.

  We do not make individual security selections but leave this to the asset managers that manage the funds and
  ETFs that we purchase. We use two types of asset managers. Passive managers (primarily through ETFs ) that are
  low cost and look to track a certain market or asset class and active managers who attempt to outperform their
  respective market through superior selection and/or timing: We work with active managers whose primary
  method of analysis is Fundamental Analysis, analyzing individual companies and their industry groups, such as a
  company’s financial statements, details regarding the company’s product line, the experience and expertise of
  the company’s management, and the outlook for the company’s industry. The resulting data is used to measure
  the true value of the company’s stock compared to the current market value. The primary risk of fundamental
  analysis is that information obtained may be incorrect and the analysis may not provide an accurate estimate of
  earnings, which may be the basis for a stock’s value. If securities prices adjust rapidly to new information, utilizing
  fundamental analysis may not result in favorable performance.

  We primarily engage in Long Term Purchases. This means that securities are purchased with the expectation that
  the value of those securities will grow over a relatively long period of time, generally greater than one year. Using
  a long-term purchase strategy generally assumes the financial markets will go up in the long-term which may not
  be the case. There is also the risk that the segment of the market that you are invested in or perhaps just your
  particular investment will go down over time even if the overall financial markets advance. Purchasing
  investments long-term may create an opportunity cost – “locking-up” assets that may be better utilized in the
  short-term in other investments.

  On a limited basis, we may also engage in Short Term Purchases. This means that securities are purchased with
  the expectation that they will be sold within a relatively short period of time, generally less than one year, to take
  advantage of the securities’ short-term price fluctuations. Using a short-term purchase strategy generally assumes
  that we can predict how financial markets will perform in the short-term which may be very difficult and will incur

Shellman Investment Management, LLC
Form ADV Part 2A Brochure

  a disproportionately higher amount of transaction costs compared to long-term trading. There are many factors
  that can affect financial market performance in the short-term (such as short-term interest rate changes, cyclical
  earnings announcements, etc.) but may have a smaller impact over longer periods of times.

                 Investing in securities involves risk of loss that Clients should be prepared to bear.

  The investment advice provided along with the strategies suggested by Shellman Invest will vary depending on
  each client’s specific financial situation and goals. This brief statement does not disclose all of the risks and other
  significant aspects of investing in financial markets. In light of the risks, you should fully understand the nature of
  the contractual relationship(s) into which you are entering and the extent of your exposure to risk. Certain
  investing strategies may not be suitable for many members of the public. You should carefully consider whether
  the strategies employed would be appropriate for you in light of your experience, objectives, financial resources
  and other relevant circumstances.

  General Investment Risk: All investments come with the risk of losing money. Investing involves substantial risks,
  including complete possible loss of principal plus other losses and may not be suitable for many members of the
  public. Investments, unlike savings and checking accounts at a bank, are not insured by the government to protect
  against market losses. Different market instruments carry different types and degrees of risk, and you should
  familiarize yourself with the risks involved in the particular market instruments in which you intend to invest.

  Loss of Value: There can be no assurance that a specific investment will achieve its investment objectives and
  past performance should not be seen as a guide to future returns. The value of investments and the income
  derived may fall as well as rise and investors may not recoup the original amount invested. Investments may also
  be affected by any changes in exchange control regulation, tax laws, withholding taxes, international, political and
  economic developments, and governmental economic or monetary policies.

  Interest Rate Risk: Fixed income securities and funds that invest in bonds and other fixed income securities may
  fall in value if interest rates change. Generally, the prices of debt securities rise when interest rates fall, and their
  prices fall when interest rates rise. Longer-term debt securities are more sensitive to interest rate changes.

  Credit Risk: Investments in bonds and other fixed income securities are subject to the risk that the issuer(s) may
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