678-905-5723 www.horsecovepartners.com

Horse Cove Partners High Yield Strategy

Horse Cove Partners LLC Suite 120

1899 Powers Ferry RD SE Atlanta, GA 30339

Horse Cove Partners LLC Absolute Return Strategy

Profiting from the Art and Science of taking Risk. ®

HC 2-1-2016

Horse Cove-Executive Summary • Risk driven investing where return is the by-product

– “The art and science of taking risk.”® • Rules based system that is replicated weekly

– Sound statistical grounding based on over 65 years of market history

– Since implied volatility is almost always higher than actual volatility, the sellers of volatility have a systematic advantage.

• Senior industry veterans executing an investment process built on more than a decades worth of institutional experience trading options

• Delivering compelling, non-correlated absolute returns

3

We do not believe we are smarter than the market, nor can we time the market in any given week or month. As a result, we take an approach similar to an insurance company in our investment strategy that focuses on probability of success and the management of risk. All investments entail risk. Loss events do occur. However, there is an undeniable characteristic of investors (humans), we have an overwhelming fear of large loss and that translates into overpaying for “insurance”. Horse Cove makes money because at its core, insurance is over-priced. As advisers, we understand that events will occur. “When” they will occur is the unknown. One of the keys to success is to take intelligent losses when those events occur and expect that the trading strategy will result in positive performance net of those losses over time. We believe our success comes from focusing on the risk of each trade. By maintaining a weekly investments horizon and relying on over 60 years of history of market movement we believe it is possible to realize positive returns through option transactions, while maintaining acceptable risk limits.

How Horse Cove Does It.

4

“Odds in our favor”

• The S&P 500 index is relatively stable week to week. Since Jan. 3, 1950 through Dec. 2014, in 3,380 weeks, the market has moved up or down less than 6%--97.76% of the time.

• With VIX below 20.0% no declines in S&P 500 greater than 5% in any week.

• Weekly movements up or down greater than: 8% or more 21 times----0.62% 7% or more 36 times----1.06% 6% or more 76 times----2.24%

S&P 500 In Perspective

Source: Yahoo Finance 12-29-2014

2 1 1 2 2 8 14 11

53 90

211

451

629

813

610

295

105

46 26

7 8 1 0 2 0 2 0

100

200

300

400

500

600

700

800

900

Num

ber o

f Occ

uren

ces

% of weekly movement

Histogram Weekly S&P 500 Index Jan. 1950 to Dec. 2014

Series1

3,380 weeks

Option positions written “on the wings”. Typical of a less than 20% volatility environment.

Source: S&P 500 Price 12-29-2014 5

We use a normalized distribution formula to calculate probability.

6

Model inputs: VIX Time to expiration Mean Standard Deviation Current S&P 500 Index level Interest Rate

Output is strike prices that meet our probability standards Put spreads are generally written at 99.5% probability of success.

Typically 5.0% plus out of the money. Call spreads are usually written at 90.0% or higher. Typically 3.0%

or more out of the money.

Investment process focused on risk where return is the output, replicated

weekly.

The Investment Process self adjusts to market risk.

7

Sell Call 2215

Sell Call 2160

Sell Put 1990

Sell Put 1885

8 5 2 0 Days

2.9%

5.4%

30% Volatility Environment

15% Volatility Environment Current Index

2100

5.5%

10.2%

As risk (volatility) increases, option contracts are written farther out of the money at the same probability of success. In both cases, puts are sold at 99.5% probability and calls at

90.0% probability.

8

Four basic volatility environments:

Low steady volatility High constant volatility Volatility rising Volatility declining With higher volatility comes higher option premiums as more fear enters the market. Therefore, the most challenging environment for the strategy, is in rapidly rising volatility while the options are open, which is why our market exposure is a week. A weekly investment cycle has fewer unknowns then a monthly or yearly cycle.

Market Conditions

0.000%

20.000%

40.000%

60.000%

80.000%

100.000%

120.000%

1Second

1 Day 5 Days 7 Days 30 Days 6months

1 Year 5 Years 10 Years

% of Known Information that Could Effect Price (RISK)

% of Known Information

9

The execution of this strategy can be best described as simple but not easy. This is not a passive strategy. Probability changes as the market moves. Influenced by time to expiration and volatility, repositioning options positions and managing margin with the Prime Broker are critical to success. Portfolio margining can create significant pressure on short positions sometime on an inter-day basis. One for one protective puts and calls purchased in an effort to maximize portfolio

margining. Long VIX options may be utilized to hedge catastrophic decline.

Collateral usage per contract is adjusted to permit trading flexibility.

Repurchase or roll down puts, or repurchase and roll up calls, if the probability

declines to 1 standard deviation (66.6%)

Trade Management

10

Most investors believe option strategies are dangerous and volatile. We have all been taught that high returns come with high risk. This inevitably leads to a question that starts out as, “but what if?” Followed by an example of a market event. The risk associated with option spreads can be mitigated. The questions is how much of the return is the investor willing to give up to insure against an event that either has never or is very unlikely to occur? • In the last 65 years, 97.74% of the time the S&P 500 has moved less than +/- 6% in a week. • Since the introduction of the VIX in 1990, the S&P 500 has not declined greater than 5%

when the VIX has been below 20%. • According to a report published by the CFA Institute, while one would assume a normal

distribution of market movement, 95.6% of all trading days fall within one standard deviation.

• Of the 20 largest daily declines in the S&P the largest was Oct. 19, 1987 at -20.47%, the range of the next 19 is from -9.03 to -5.28% At Horse Cove we have a made a business decision with our own money, and that of our family and friends, that the cost to insure against the unknown remote event in the future, is not worth the cost of return in the present.

Yes, but what if?

11

Accounts offered by separately managed accounts with Interactive Brokers LLC as custodian that offer the following benefits: • Account is in the clients name • Full transparency • Full liquidity

• Contributions/Withdrawals Daily • No lock-up Period

• Ability to suspend trading with a phone call or by the click of a mouse online • Horse Cove only has a trading authorization, no ability to move funds • No waiting for audits or K-1s at year end • No funds borrowed to leverage the strategy

• Beneficial tax treatment of option income as 60% long term and 40% short term

capital gains under IRC Sec. 1256

The Horse Cove Model

12

Performance

Since inception of trading in December 2010. All net of fees including 2% management fee and 20% incentive fee.

Jan Feb Mar April May June July Aug Sept Oct Nov Dec Year 2015 4.70 3.08 2.43 0.20 1.76 4.58 2.76 -10.39 5.04 -1.96 3.67 3.91 20.42 2014 -3.77 1.10 4.91 0.74 2.39 2.26 0.98 4.36 2.82 -7.52 2.08 3.01 13.44 2013 2.16 3.16 2.08 -0.43 -0.43 5.42 2.86 3.38 2.54 0.02 0.55 3.90 28.12 2012 3.16 3.20 2.00 3.81 5.48 0.23 3.37 5.17 -1.37 4.34 2.88 6.40 45.96 2011 0.21 1.73 2.91 0.95 3.36 4.42 2.62 -12.41 16.20 9.55 -15.29 12.69 24.85 2010 -1.29 -1.29

Average monthly return since inception for the period ending Dec. 2015: +2.01% Average When Positive: 3.33% Maximum Drawdown: -15.29% Average Drawdown: -5.49% Drawdown Duration: 3 months Best 12 months: 57.44% Worst 12 months: 8.53% Average Rolling 12 months 27.95%

Annual Performance Relative to S&P 500--Inception to Dec. 2015

-5

0

5

10

15

20

25

30

35

40

45

50

Dec. 2010 2011 2012 2013 2014 2015

Horse Cove Performance S&P 500 Performance

*Trading commenced as of December 2010. Historic returns and statistics in this document are illustrative and provided for information only, and are based on information that we believes to be fair, and accurate. Past performance does not guarantee future results. S&P 500 Source: www.spdji.com

13

14

Samuel T. DeKinder

Managing Director and Portfolio Manager Samuel T. DeKinder has over 40 years of investment experience. He is the Founder of Horse Cove Partners. Following his

retirement from Invesco Ltd in 2006., Mr. DeKinder was a partner and Vice President of Marketing for FISCO Appreciation Management LLC. Mr. DeKinder served as a member on the Board of Directors of Invesco, MIM PLC (the predecessor to Invesco Ltd.), in addition to a variety of executive capacities during his nearly 20 years with Invesco. He currently serves as a member of the Board of Directors of Kennedy Capital Management. Previously, Mr. DeKinder was a Co-Founding Principal of DeMarche Associates, one of the nation’s most prominent investment consulting firms. He graduated from the University of Oklahoma with degrees in Economics and Statistics. Kevin Ellis

Managing Director Mr. Ellis brings more than 30 years of financial, administrative and operations experience to the Firm. Additionally, he is COO

and a principal of FISCO Appreciation Management LLC. Previously, Mr. Ellis served as a Founding Principal, Managing Director and COO at Labyrinth Group, LLC, an investment management firm utilizing structured securities. Prior to that, he was Manager of Corporate Development at Arthur Anderson, LLP, where he focused on finance, mergers and acquisitions. Earlier in his career, he served as Vice President of Business Planning at SUPERVALU, Inc. Mr. Ellis is a graduate of Minnesota State University-Mankato BA Finance and earned a Juris Doctorate from William Mitchell College of Law and was admitted to the bar in Minnesota in 1983.

Experienced Management Team

15

John Monahan

Director of Development Mr. Monahan is a business development and client relations expert in the investment management industry. He began his

career as the youngest Regional VP – Group Pension Division for Union Mutual. In 1985 John co-founded and steered the build-out of PRIMCO Capital Management from the ground up, propelling assets under management from zero to $10B in 5 years. PRIMCO was acquired by INVESCO in 1991. He joined INVESCO as a Global Partner in 1991 and launched and led institutional market development spanning the US (Puerto Rico) Canada, the Middle East, South America, Bermuda, and the Caribbean. Since 2006 John has co-founded 3 firms, all subsidiaries of Peachtree Commonwealth. John completed executive education at The Wharton School of the University of Pennsylvania and earned a BA in American Studies from St. Michaels College. He possesses conversational fluency in French and basic fluency in Spanish..

Mike Crissey Director Mike Crissey has over 30 years experience in Institutional Sales, Marketing, Client Servicing, Consultant Relations and Institutional Investment Consulting. From 2000 to 2013 he held sales, marketing and client servicing positions with Pathways Financial Partners, Fisco Investment Management, Principal Global Investors and Sirach Capital Management. Prior to Sirach Capital Management, Mike was a Senior Vice President of DeMarche Associates, one of the nation’s leading investment consulting firms. At DeMarche he managed the operations of the firm and later created and ran a consulting service to 50 of the largest investment firms in the US. 1982 to 1999. Mr. Crissey is a native of Missouri and a graduate of the Penn Valley Community College receiving a degree in Computer Science with an emphasis in Systems Design. Mr. Crissey and his wife Judy reside in Tucson, Arizona.

Experienced Management Team

16

Gregory Hyde

Director of Advisor Services Greg Hyde has spent his career helping financial service companies succeed in new business development. Prior to joining Horse Cove Partners, Mr. Hyde was Chief Executive Officer for Stone Toro Financial Services. He has held multiple positions in the financial and investment industry including Vice President for Calamos Investments, Executive Vice President Regions Financial, Head of Institutional Services, Executive Vice President & Director for Princeton Retirement Group/Merrill Lynch (a prior AMVESCAP Retirement Company where Mr. Hyde was a Global Partner) and was responsible for Corporate Development and National Sales. Early in his career, Greg was a Senior Vice President of Putnam Investments where he served as Western Division Sales Manager, and was a Senior Vice President and National Sales Manager for Retirement Plans at MFS Financial Services. A former member of the U.S. Navy, Greg graduated from the University of Phoenix, where he received his MBA. He earned his BA degree from Framingham State University, where he majored in economics.

Experienced Management Team

17

Statistical Probability: Puts > 99.50% Calls > 90.0% Management Fees 2.00% per annum Incentive Fee: 20% of net return assessed quarterly Minimum: $250,000 Investor Requirements: Accredited investor and qualified client or qualified purchaser Contributions/Withdrawals: Weekly No lock-up Period Separately Managed account with Interactive Brokers LLC as custodian

Summary Overview

18

DISCLOSURE Dec. 2015

Prior performance shows results achieved during past market periods and is not indicative of future results, which will depend, among other things, on future market conditions. No representation is being made that the strategy will or is likely to achieve returns similar to those shown. Results are shown net of fees and expenses but do not reflect withdrawals or income taxes that might be payable, the effects of which could significantly reduce cumulative returns. The strategy was not available until December, 2010. For the period commencing December 2010 and ending February 2013, the results reflect the monthly deduction of a 2% per annum management and 20% performance incentive, and brokerage fees and commissions which would have been incurred by the strategy . Commencing in March 2013, results are composite results net of 2% per annum management fee assessed daily and 20% incentive fee crystalized quarterly all as calculated by the firms broker. There can be no assurance that the results shown will be replicated in the future. Options are speculative and highly leveraged. Although the strategy usually writes options that, when written, Manager believes will have a 90% or more probability of success based on volatility and term, specific market movements of the index underlying the option cannot be accurately predicted. As the writer of put and call options, the strategy is subject to the significant risk of loss if the index moves to levels below or above the strike price of the option. Economic leverage is possible if options move beyond the option strike price. The Manager may employ risk management strategies which are intended to reduce risk but cannot eliminate it. Costs of such strategies may reduce potential returns. Risk management strategies may include writing options on other indices, writing outside the strategy’s general parameters (including probabilities outside the stated target), and writing for longer or shorter durations. This document is for illustrative purposes only and should not be regarded as an offer or solicitation for advisory services offered by the Investment Manager or its affiliates, officers, directors, agents or employees. This material is not authorized for re-distribution unless it is accompanied by strategy disclosures. The strategy represents a speculative investment and may involve a high degree of risk. An investor may lose all or part of their investment. There can be no assurance that the strategy will achieve its investment objectives. Fees and expenses may offset trading profits. There are restrictions on redeeming interests in the fund, and there is no secondary market for the interests. Prospective investors should carefully review the firm disclosures, and should consult with their financial advisors before making an investment.