Shoals Capital Management LP

Item 5: Fees and Compensation

 In general, as compensation for investment supervisory services rendered to the Fund, Shoals is paid a
 monthly management fee (“Management Fee”). In addition, Shoals Financials Opportunity GP, LLC, an
 affiliated entity that acts as general partner (the “General Partner”) to the Fund, receives an annual incentive
 allocation (“Incentive Allocation”) from Fund investors. The Fund also bears additional expenses and fees,
 including the costs of formation and ongoing operational and legal expenses, as set forth in the applicable
 Fund offering documents (“Fund Documents”). Investors should review the Fund Documents for details
 regarding fees, some of which are summarized below.

 Management Fees

 With respect to the Fund, the Management Fee annual rate varies from 0% to 1.5% of Fund gross assets
 and is paid monthly in arrears. The Fund Documents allow the Firm or the General Partner to waive or
 agree to reduce the Management Fee for one or more investors without waiving or reducing it for all
 investors.

 Incentive Allocations

 The General Partner is entitled to receive an Incentive Allocation at rates that vary from 0% to 20.0% of
 Fund net profits, if any, calculated and paid annually following the Fund’s fiscal year-end. Such potential
 Incentive Allocation is subject to a high-water mark, as outlined in the Fund Documents. The Incentive
 Allocation payable for any period other than a full fiscal year, in conjunction with investor subscriptions
 and redemptions that take place throughout the year, may be proportionately adjusted to the extent provided
 for in the Fund Documents.

Form ADV Part 2A                                                                                              3

Shoals Capital Management, LP

 Payment of Management Fees and Investment Allocations

 The Fund’s administrator, through a written agreement outlining the services provided to the Fund, deducts
 the Management Fees monthly and the Incentive Allocation annually (and otherwise), all in arrears, from
 each Fund investor account as applicable. The administrator wires the proceeds of the Management Fee to
 the Firm and the proceeds of the Incentive Allocation to the General Partner, both net of Fee and Allocation
 sharing amounts due to any third-party marketing entities as outlined in Item 14.

 Shoals does not act in any capacity as a broker‐dealer, and accordingly, does not receive any compensation
 for acting as a broker‐dealer. In addition, neither Shoals nor any of its employees accepts compensation
 for the sale of securities or other investment products, including asset‐based sales charges or service fees
 from the sale of pooled investment vehicles. None of Shoals, the General Partner, or any of their employees
 receives any compensation from the Fund other than the Management Fee and the Incentive Allocation.

 For more information on brokerage activity, see Item 12.

Item 7: Types of Clients

 Shoals currently provides investment advisory services only to the Fund. The investors participating in the
 Fund may include high net worth individuals, banks, insurance companies, pension and profit-sharing plans,
 trusts, estates or charitable organizations, educational and research institutions, corporations or other
 business or investment entities, and, directly or indirectly, the Firm, the General Partner, and their
 employees and other affiliates.

 Interests in the Fund are offered pursuant to applicable exemptions from registration under the U.S. Securities
 Act of 1933, as amended (the “Securities Act”), and the U.S. Investment Company Act of 1940, as amended
 (the “1940 Act”). Investors in the Fund are required to be “accredited investors” as defined in the Securities
 Act. Minimum investment amounts for investors may vary by type and may be waived by Shoals subject
 to regulations governing investments in the Fund.