Shemitah Investment Advisors LLC

Transcription

1 Shemitah Investment Advisors LLC 5376 Tomah Dr. #117 Colorado Springs, CO (719) Shemitahinvestmentadvisors.com Form ADV Part 2A Client Brochure July 27th, 2015 This brochure provides information about the qualifications and business practices of Shemitah Investment Advisors LLC. If you have any questions about the contents of this brochure, please contact us at (719) The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Registration as an investment advisor does not imply any special level of skill or training. Additional information about Shemitah Investment Advisors LLC also is available on the SEC s website at The firm s CRD number is

2 Item 2 - Material Changes This is the first brochure produced by Shemitah Investment Advisors LLC (SIA), so there are no material changes to disclose. 2

3 Table of Contents Page Item 4 Advisory Business.4 Item 5 - Fees & Compensation.5 Item 6 Performance Based Fees..6 Item 7 Types of Clients 6 Item 8 Methods of Analysis, Investment Strategy, and Risk of Loss 6 Item 9 Disciplinary Information.11 Item 10 Other Financial Industry Activities & Affiliations 11 Item 11 Code of Ethics and Conflicts of Interest 12 Item 12 Brokerage Practices 13 Item 13 Review of Accounts & Strategies.. 14 Item 14 Client Referrals and Other Compensation.15 Item 15 Custody 15 Item 16 Discretionary Authority 16 Item 17 Voting Client Securities 16 Item 18 Financial Information 16 Item 19 State Registered Advisor.17 3

4 Item 4 - Advisory Business Our Company Shemitah Investment Advisors LLC is a Registered Investment Advisor (RIA) with the state of Colorado. We are a new company with no business history; we currently have roughly $2,000,000 under management at the time of this writing. Its sole owner is Mark Hirleman, who will also act as the Investment Advisor Representative. Our Services We offer investment advising services primarily for clients who believe that there is a reasonable chance that the 2015 Shemitah year will culminate in a significant stock market & financial collapse in the fall of 2015, followed by a dramatic rise in gold & silver prices. Therefore, we specialize in market timing based on the 7 year Shemitah cycle. (See Item 8 for more information on our market timing prediction and investment strategy). Our services aim to help clients protect their wealth -- and perhaps even profit -- in the event that this collapse prediction comes to pass; our services also involve significant risk of monetary loss in the event that this prediction is incorrect. If you do not adhere to this Shemitah collapse prediction, our services may not be right for you. However, we also offer more traditional investment advisory services. Customization of Accounts Our services will be tailored to each client s financial situation, investment objectives, and risk tolerance. It is important to take into account factors such as income, assets and liabilities, expected age of retirement, and tax issues when advising on an appropriate portfolio. Ultimately our clients will have to determine their investment objectives in terms of a potential 2015 Shemitah collapse. Do you simply want to protect your wealth? Are you looking for some potential growth? Is your objective ultra-aggressive speculation? Or perhaps you want to look into buying some insurance in the event of the collapse? Whatever your investment objectives may be, Shemitah Investment Advisors will help you decide on the appropriate portfolio, and ensure that all the RISKS involved are ABUNDANTLY CLEAR. We also will evaluate your personal risk tolerance based on a number of factors: i.) How confident are you that the 2015 Shemitah will result in an economic and financial crisis? ii.) How significant do you think the stock market crash will be? iii.) Do you believe it will ultimately result in rising gold & silver prices? iv.) How high do you think precious metals will go and in what time frame? v.) How much are you willing to lose if the Shemitah collapse does not happen? 4

5 After clarifying your investment objectives and risk tolerance, we will help you will decide which portion of you assets under our discretionary authority will be allocated to various risk-levels (to be discussed in Item 8), while factoring in your current financial situation. Wrap Fee Programs SIA does not participate in Wrap Fee programs with broker dealers. Assets under Management SIA currently has $2,000,000 under management as of July 27th, Item 5 - Fees and Compensation. Compensation Our ongoing fees are calculated based upon assets under management (i.e. the total value of your account under our management). These fees are negotiable. Asset Management Fees Total Assets Annualized Fee First $100, % Next $900, % Over $1,000, % Deduction of our Fees Client fees will be deducted from client account on a quarterly basis. The initial fees are calculated based upon the date the account agreement is accepted, the initial value of the account, and covers the remainder of the calendar quarter. The client agreement allows us to deduct the ongoing fees, on a quarterly basis, in advance, according to the fee schedule in your contract. (More on the deduction of fees in Item 15 on Custody.) Other Fees In addition to the management fees described above, you may incur the following charges: Custodian fees, transfer fees, wire fees, priority mail or postage, brokerage fees and commissions, and margin interest (if margin account). Fees Paid in Advance 5

6 Quarterly fees are charged in advance. If you want to terminate your account, we require a written notice through certified mail. Upon receipt of your termination statement we will pro-rate the fees charged in your account for the actual days managed and return any unearned fees. Other Compensation SIA and/or our representatives will not receive any other compensation for the sale of securities or other investment products. Item 6 Performance Based Fees SIA does not charge any performance based fees, nor do any supervised representatives receive any performance based fees. Item 7 - Type of Clients We manage assets primarily for clients who believe the seven year Shemitah cycle could result in a stock market and financial collapse in the fall of Our focus is on individuals, but we may manage assets for banks, pensions, trusts and estates, charitable organizations, and corporations if the opportunity arises in the future. Our minimum requirement to open an account is $100,000. However, SIA reserves authority to make an exception to this minimum at our sole discretion. (These exceptions will likely be for clients who want an insurance policy type investment, in the form of the EXTREMELY High-Risk put options.) The firm also reserves the authority to decline accounts for any reason. Item 8 - Methods of Analysis, Investment Strategies, and Risk of Loss Analysis Our analysis is based primarily on the view of the Austrian School of economics. Our analysis concludes that America and the world are on the verge of financial collapse, based on many factors: the US Government debt and deficit situation, the US Dollar in the process of losing its world-reservecurrency status, the large amounts of US Treasuries and US Dollars overseas which could cause a significant dollar crash, various asset bubbles and debt bubbles caused by Federal Reserve Bank policies, extremely high debt levels for governments, individuals, and corporations across the global, and the precarious situation of $1 Quadrillion worth of derivatives outstanding that could eventually trigger a 6

7 significant banking crisis. Moreover, our analysis suggests that gold & silver will do very well in this potential crisis situation that may be coming. Most importantly, our analysis includes a timing prediction that the collapse will occur around the end of this Shemitah year, in the fall of 2015, based on the seven year cycle that has been in place for decades. Again, if you don t believe this is a significant possibility, we may not be the right investment advisor for you. For the gold & silver mining stock portion of the investment strategy, SIA will use independent, thirdparty research and analysis including that provided by goldsilverdata.com at a cost of $99 per year. The fee provides access to a great database on nearly every gold & silver mining stock in existence, including a rating analysis on each company. The database will be used as a starting point to narrow down potential gold & silver mining stock picks. After narrowing down the stocks using goldsilverdata.com, we will use our own fundamental analysis to assess each prospective company s financial situation and growth potential before making final decisions in terms of stock picks. Material Risks Our investment strategy should be considered unorthodox, and is subject to greater amounts of risk than a conventional investment strategy. Our strategy involves an attempt to time the market, which is notoriously difficult to succeed in. If the timing prediction is incorrect, the result will be significant losses, particularly for those who choose a more aggressive approach. SIA representatives will ensure that clients are keenly aware of the risks involved in the investments chosen. Investment Strategy Overview We will employ a tactical investment strategy in an attempt to time the market. Attempting to time the market is certainly an alternative investment strategy, as most main-stream investment professionals believe in the efficient market theory that essentially states that it is impossible to time the market. There is significant risk of loss if the timing prediction is incorrect. Market Timing Prediction Our market timing prediction revolves around the seven year Shemitah cycle of the modern Jewish calendar, and more specifically the Day of Remittance on September 13 th, The prediction is as follows: a stock market downturn will likely begin in August and result in a stock market crash in September and October. Following the stock market crash, there will be a rapid, significant rise in gold & silver prices. Again, if this prediction is incorrect, the result will be significant losses, particularly for those who choose aggressive investments. Investment Strategy Details Given the market timing prediction, we will go short (bet against) the stock market in the summer of 2015, in the form of inverse ETFs, traditional shorts, and various put options depending on risk 7

8 tolerance. (The decision as to when to sell these positions is at our discretion, as discussed in Item 16.) When the short positions are sold, likely in October, we will enter into a gold & silver mining investment, in the form of ETFs or individual stocks and warrants, depending on risk tolerance. (Again, the decision as to when to buy these positions is at our discretion.) Within this general investment strategy, there are various levels of risk to choose from, based on your risk tolerance. Low-Risk Strategy & Risks The low-risk strategy involves purchasing inverse ETFs (exchange-traded funds) on stock market indexes, or traditional shorts on a 1 to 1 leverage basis. The risk is that the stock market will go up, which will result in losses. The losses will be roughly 1% loss for every 1% rise in the stock market while the positions are held. For traditional short selling, even on a 1 to 1 leverage basis, there is theoretically the potential for unlimited losses. If you borrow a stock at $20 and it gaps up to $100, then the investor could owe more money than was originally deposited in the account. There are many safeguards put in place by brokerages and regulators to avoid this outcome if at all possible. Moreover, the strategy involves shorting the S&P 500 index ETF (SPY) or a diversified portfolio of shorts, so the chances of a major gap up in overall share value is extremely low. As for the gold & silver mining investment, the lower-risk strategy involves buying gold & silver mining ETFs. The main risk is in gold & silver prices going down while the position is held. Also, gold & silver mining stocks are leveraged to the underlying metal price. So a 1% decline in gold, for example, will likely result in a greater than 1% decline in the value of the mining ETF, perhaps a 2%-3% decline or more. Moderate-Risk Strategy & Risks The moderate-risk strategy involves traditional shorts on stocks and stock market indexes at the maximum allowed 2 to 1 leverage basis. Generally, this will involve a 2% loss for every 1% rise in the underlying stock or stock market index, plus all interest expenses. In terms of gold & silver mining investments, the moderate-risk strategy will involve purchasing individual mining stocks with relatively strong balance sheets and the ability to survive years at the prevailing gold & silver prices. These stocks will include the metal price risk, but also involve more risks than the ETFs due to less diversification. High-Risk Strategy & Risks The high-risk strategy will involve purchasing put options on the SPY (S&P 500 ETF). (A solid understanding of how options works and the risks involved will be required for any client wishing to invest in options.) These put options will be late-dated (January 2017 expiration) and will range of strike-prices from near-the-money to far in-the-money. These put options will involve significant risks 8

9 to hold for a period of about two months (the likely holding period is from late-july to mid-september at the very least). The risks will vary depending on the strike-price; the lower the strike-price, the greateer the risk. Even if the market is flat during the holding period, these put options will likely decline 1%-20% depending on the strike-price. If the market rises significantly, the losses very well could approach 50% or more. (A detailed diagram of estimated losses will be available for clients who choose this option). The gold & silver high-risk portion will involve buying stock in individual companies with financial problems at the prevailing metals prices. These companies will be at risk of bankruptcy if gold or silver don t rise significantly in a 3-12 month time frame. Significant risks are still in place not only if gold & silver drop further after purchase, but also the risk that gold & silver prices don t rise significantly. These stocks will include a very real risk of 100% LOSSES. EXTREMELY High-Risk Strategy & Risks Our EXTREMELY high-risk strategy involves buying put options on SPY (S&P 500 ETF), with short-dated expirations and far out-of-the-money. The expirations will primarily be in October or November, with some as early as late September. The strike prices will be far out-of-the-money, in the range of 15%- 25% below the prevailing market value when the options are purchased. This strategy involves an EXTREME level of risk. If the stock market does not crash significantly in the exact timeframe predicted, the losses will be in the 80%-95% if the stock market is relatively flat and the options are liquidated before expiration. The losses with be very close to 100% if the stock market rises to any significant degree (5% or more), or the options are held to expiration. The EXTREMELY high-risk strategy also involves purchasing stock warrants of gold & silver mining companies. A warrant is essentially the same thing as a call option, but it is guaranteed by the company itself. There is a strike price that will likely be significantly above the market price (for some the strike price could be as much as 10 times higher than the market price) and there is an expiration date. If gold & silver prices don t rise significantly and rapidly within the predicted time frame, the result will likely be close to 100% LOSSES. Client Allocation Choices Clients will have the opportunity to decide what percentage of assets under our management will go in each of the various risk levels, depending on investment objectives and risk tolerance. We will make recommendations based on the client s financial situation and other assets; however, it will ultimately be the client s decision as to how conservative or aggressive to be within the investment strategy. Clients will also have the opportunity to change their allocation decisions at any time. Future Investing Strategies SIA was created strictly for investing from the summer of 2015 to roughly the summer of 2016 timeframe. We believe that there will be a bubble in gold & silver in 2016, and therefore we will not want to hold on to those positions for too long. It is likely that all current investment strategy assets will be liquidated in the first half of There are currently no specific investment strategies in place 9

10 thereafter. If there is a new investment strategy in place at that time, you will receive notice in the form of a new investment strategy newsletter. It will then be your decision as whether or not to proceed. Particular Securities and Other Material Risks: There are a number of risks to disclose, which are not necessarily specific to this investment strategy, but for investing in general. First, there is a brokerage default risk. If there is a significant stock market crash as predicted, some brokerages could end up in default and be unable to return client funds in the full amount. We recommend Interactive Brokers for clients with this risk clearly in mind (See Item 12 for more information on Interactive Brokers). There is also an ETF counter-party default risk, particularly for inverse ETFs that we are recommending. There is no precedent for this, so the risk remains relatively low; however, this collapse may very well be unprecedented. The ETF risk is due to the fact that the assets held in the ETF are derivatives contracts with major banks, which have extreme derivative exposure risk. In the event that the financial collapse takes down the bank holding the other side of the derivatives contract, the inverse ETF will likely lose significant value. For this reason we are recommending traditional shorts whenever possible; however, IRAs do not allow margin accounts and thus short selling is not possible. We will be monitoring the situation carefully for signs of a derivatives collapse in order to exit ETF positions before they become worthless; however, there is certainly no guarantee that we can liquidate positions in such a situation. There is also the risk of an options clearinghouse default. This has never happened in America, so the risks should be low, but the risk will rise in the event of a serious financial crisis. An options clearinghouse is responsible for guaranteeing payment on options that expire in-the-money. Unfortunately, these clearinghouses also clear derivatives, which may play an integral role in the potential financial collapse. We will mitigate this risk, first of all, by selling the options before expiration. Also, we will monitor the derivatives situation, and attempt to liquidate options if this risk seems to be rising significantly. Again, there is no guarantee that we can avoid this risk entirely. When holding gold mining stocks, there is the risk of legislation that makes gold illegal, similar to what happened here in America in There is also the risk of gold mine nationalizations. There is enormous downside risk for gold mining stocks in these situations. We will mitigate this risk by liquidating gold & silver mining positions after a relatively short holding period, likely no later than mid Also, the higher the price of gold goes, the more likely such a law will be put in place. For this reason, we will likely sell gold mining stocks if gold goes above $2,500 an ounce. Risks Reiterated Risks abound in our investment strategy. There is a strong possibility of 100% Losses in your investment portfolio if you choose to put any assets into the EXTREMELY High-Risk Strategy. Even investments that 10

11 are described as low-risk are subject to counter-party risk if the financial collapse is extreme and unprecedented. Ultimately, in order for this investment strategy to be profitable, the timing predictions need to be correct and many other counter-party risks need to be avoided. In many other circumstances, this investment strategy will result in significant losses. Item 9 - Disciplinary Information Shemitah Investment Advisors LLC and/or any management person of the firm, regarding civil or criminal action, SEC, any other federal regulatory agency, any state regulatory agency or any foreign regulatory agency, has not been charged, convicted, caused or been involved with any felony or misdemeanor involving any investment related business of the following categories: -Criminal or Civil Action -SEC Administrative Proceeding -Self-Regulatory Proceeding Item 10 - Other Financial Industry Activities and Affiliations Management Persons and broker dealer registrations No management persons of SIA are registered, nor have an application pending to be registered, as a broker-dealer or registered representative of a broker dealer. Management Persons commodities or futures registration No management persons of SIA are registered, nor have an application pending to be registered, as a futures commission merchant, commodity pool operator, or commodity trading advisor. Management Persons conflict of interest information: SIA does not have a relationship or arrangement that is material to our advisory business with related persons or firms outside SIA. SIA reserves the right to accept clients as referrals from other registered investment advisors, and fees may be split between firms or a referral fee may be paid. At the present time we have no such agreements in place. Other investment advisors and conflicts of interest: We do not select or recommend other investment advisors for clients. 11

12 Item 11 Code of Ethics and Conflicts of Interest Code of Ethics pursuant to SEC rule 204A-1: SIA is not an SEC-registered investment advisor; therefore, we are not required to adopt a Code of Ethics pursuant to SEC rule 204A-1. There is currently no Code of Ethics in affect for SIA. Interest in Securities Recommended for Clients Shemitah Investment Advisors LLC and/or our representatives do not recommend, buy or sell securities to or from clients in which we have a material interest. Personal Trading Conflicts of Interest Shemitah Investment Advisors LLC and/or our representatives may personally trade similar securities as clients. Personal trading in similar securities that clients own is not permitted prior to client executions, either buys or sells. Buying and Selling Same Securities Conflicts of Interest: Shemitah Investment Advisors sole owner and sole Investment Advisor Representative (IAR) (and perhaps IARs hired in the future) will certainly have money invested in the same investment strategy as clients, and will therefore be buying and selling securities which clients also buy and sell; this can be considered a conflict of interest. To address this conflict of interest, our policy (11C above) is that no trades will be placed prior to client trades, to remove any potential monetary advantage. Securities owned by SIA and/or SIA representatives will either be bought or sold after all client accounts, or will be treated as every other client account. In the latter case, we will engage in bunching through our broker-dealer, in which securities are purchased and sold for all client accounts at the same (including SIA and our representatives) to eliminate any potential conflict of interest. So the SIA and representatives securities will be bought and sold at the same time as our clients whenever possible; if that is not possible, they will be bought and sold after clients orders are executed. Item 12 - Brokerage Practices Recommending Broker Dealer for Client Transactions: We do not recommend any broker dealer other than Interactive Brokers (IB). See Directed Brokerage comments below with regard to why we recommend IB. 12

13 Soft Dollar Arrangements: SIA receives soft dollar compensation from our broker dealer, Interactive Brokers, which creates a conflict of interest. These soft dollar arrangements are in the form of added features that are exclusive to investment advisors. These extra features may include: branding of customized statements, extra portfolio software and analytics, bloc trading software, and other superior software and trading capabilities. We will minimize this conflict of interest by fulfilling our fiduciary duty of acting in the client s best interest. Brokerage for Client Referrals We do not receive any client referrals for recommending IB as our preferred broker dealer. Directed Brokerage We request that clients set up brokerage accounts at Interactive Brokers (IB), under the Shemitah Investment Advisors LLC advisory account. We may allow clients to use another broker dealer, pending our approval. Not all investment advisor request clients use specific brokers. We make this directed brokerage request to Interactive Brokers out of our fiduciary duty for the following reasons: i.) Low Trading Costs Interactive Brokers has the lowest trading costs of any large broker dealer that we could find. Commissions are paid directly by client accounts, so it is in our clients best interest to go with the lowest cost broker dealer. (You can visit the Interactive Brokers website for more information on the low trading costs). ii.) Protection of Client Assets in the Event of a Catastrophic Financial Collapse Since we are predicting a significant financial collapse, it is of the utmost importance to choose the broker dealer will the best chance to weather the storm. Interactive Brokers is that broker dealer. They have the second highest credit rating in the industry according to Standard & Poors: an impressive A-/A- 2 outlook stable. Unlike other highly rated brokerages, however, IB doesn t have any derivatives exposure on their books (though they may have derivatives through off balance sheet arrangements), and therefore would be more likely to survive in the event of a derivatives crisis. Moreover, IB has a very large capital buffer, far above the regulatory requirements. As of its most recent (unaudited) financial statements from June 30 th, 2014, IB had net capital of over $2.2 Billion while their required net capital was only about $332,000,000. These numbers could become extremely important in the event of a catastrophic financial collapse, in which some broker dealers may become insolvent and the insurance organization that guarantee brokerage accounts may be in need of a government bailout, which may or may not be politically feasible. 13

14 Interactive Brokers is also very careful with where they invest customer money in order to provide the utmost protection. According to their website, IB does not invest in money market funds due to risks involved, even though they are permitted to do so. While there is certainly no guarantee that Interactive Brokers won t default on customer accounts, we strongly believe that IB is in the best financial condition of any broker dealer in terms of surviving a significant collapse. Aggregation of Security Purchases and Sales. We will aggregate purchases when purchasing or selling the same securities for two or more clients at the same time, at the same broker dealer. Trade orders can only be aggregated at each broker dealer and not between broker dealers. We will aggregate whenever possible because it is more efficient, mitigates conflicts of interest, and ensures that all clients will pay the same price when buying and receive the same price when selling. It will not, however, result in any cheaper commissions for clients. Item 13 - Review of Accounts & Strategies Account Reviews We review client accounts on a monthly basis and will contact you directly if anything needs to be addressed. If at any time you want to change your holdings, investment objectives, or risk allocation, we will be happy to make those changes for you as quickly as possible. Other Reviews of Client Accounts We will be following the markets and financial news closely for anything that implies that our prediction is incorrect and will be constantly reviewing the strategy in light of world events, including how the events pertain to individual accounts. If there are any significant changes to the investment strategy (apart from the timing of purchases and sales), the client will be notified directly and will have the opportunity to accept or reject the new recommendations before we proceed with the new strategy. Reports You will automatically receive quarterly reports from your chosen broker dealer regarding your account value and account activity. Also, beginning in August of 2015, we may begin sending out weekly or monthly reports about the progress of the investment strategies and returns on specific securities. These s will not be client specific, but will likely include most securities in client accounts. 14

15 Item 14- Client Referrals and Other Compensation Non-Client Investment Advice Provided to Clients We do not engage non-client parties to provide investment advice to clients or receive any compensation from others to provide investment advice to SIA clients Compensation for Client Solicitation or Referrals We currently have no arrangements to compensate unsupervised parties for the solicitation or client referrals. We may engage in similar activities in the future, and clients will be notified via the updated Form ADV 2A the following year, and any changes will be prominently displayed in Item 2. Item 15 - Custody SIA LLC has custody of client funds by the definition of Colorado state securities law (IA) solely due to the fact that SIA will be permitted to withdraw asset management fees from client accounts by invoicing the qualified custodian. Colorado law allows custody of client funds with strict rules and reporting requirements. SIA will be exempt from these custody rules and requirements because: 1). We will obtain written authorization from the client to deduct appropriate asset management fees through our advisory agreement and the agreement signed with the qualified custodian. 2). We will invoice the client and qualified custodian concurrently of the amount of fees to be deducted. The client invoice will specify and itemize the fee, including the formula used to calculate the fee, assets under management the fee is based on, and the time period that the fee covers. 3). The qualified custodian will send quarterly statements showing all disbursements from the account, including the amount of the asset management fees. We recommend clients compare the advisory fee invoice with their quarterly statement from the qualified custodian to ensure that the proper fee was applied. Item 16 - Discretionary Authority Discretionary Authority is the authority to decide which securities to purchase and sell for the client. We require discretionary authority to buy and sell securities within the parameters of the investment strategy, particularly as to when to buy and sell, and you will grant us this authority in writing through our advisory agreement. The authority will be used strictly for securities within our investment strategy and within the client s risk allocation decision. 15

16 You may choose to put specific limitation on our discretionary authority, if you wish. These discretionary authority limitations must be in writing, either through a letter or . There is currently no precedent or example within our organization for such limitations stated in writing. Item 17 - Voting Client Securities Authority to Vote Client Securities We do not have authority to vote client securities. Clients will receive proxy materials directly from their custodian or transfer agent and may elect to vote proxies on their own. Clients may contact us for advice or questions regarding specific proxy voting. We may, at some point in the future, decide to advise clients on how to vote proxies. Item 18 - Financial Information Requirements of Reporting Financial Information We do not require prepayment of investment management fees six months or more in advance, therefore, no financial information reporting is required. Financial Condition Disclosure Our discretionary authority requires us to disclose any financial condition that is reasonably likely to impair our ability to meet contractual commitments to clients. There are no such financial conditions to disclose at this time. Bankruptcy Disclosure Shemitah Investment Advisors LLC or its principles have not been subject of a bankruptcy petition at any time during the past ten years. Item 19 - State-Registered Advisor Principal Executive Officers and Management Persons: Mark Hirleman Mr. Hirleman is the sole owner and currently the only Investment Advisor Representative for SIA. He is 32 years old, and graduated with a B.A. in Economics from the University of Colorado at Colorado Springs (UCCS) in August, (UCCS GPA: 3.96, UCCS GPA in Economics: 4.0). He is a registered Investment Advisor Representative (IAR) with the State of Colorado. Other Business Activities 16

17 Mr. Hirleman has a relationship with Bulk Food International, and may solicit clients to purchase bulk food as an insurance policy against the potential extremities of the coming collapse. He may receive and disclose a commission from any potential sales, but bulk food will not be a part of SIA assets under management. There is no requirement of purchase for any clients. Performance Based Fees SIA does not charge performance based fees. Disciplinary Disclosure Mr. Hirleman has not been involved in, or found liable for, any arbitration claim, or by any selfregulatory organization, or by administrative proceeding of any of the events listed below: a.) An investment or investment related business or activity b.) Fraud, false statements or omission c.) Theft, embezzlement, or other wrongful taking of property d.) Bribery, forgery, counterfeiting or extortion e.) Dishonest, unfair, or unethical practices Relationship with Issuer of Securities Mr. Hirleman does not have any relationship or arrangement with any issuer of securities. 17