CARGILE INVESTMENT MANAGEMENT, INC.

Item 1 Cover Page Firm Brochure (Part 2A of Form ADV) CARGILE INVESTMENT MANAGEMENT, INC. 415 W Wall Street, Suite 2200 Midland, TX 79701 March 2025 TEL 432-617-1394 FAX 432-698-1590 www.Cargilelnvestments.com Mickey@Cargilelnvestments.com This brochure provides information about the qualifications and business practices of Cargile Investment Management, Inc. If you have any questions about the contents of this brochure, please contact us at: 432-617-1394, or by email at Mickey@Cargilelnvestments.com. 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. Additional information about Cargile Investment Management is available on the SEC's website at www.adviserinfo.sec.gov. 1  Item 2 Material Changes Since our last annual amendment filing on March 13, 2024, we have made no material changes to our business. In the future, this section of the Brochure will discuss only the specific material changes that were made to the Brochure and will provide you with a summary of all material changes that have occurred since the last filing of this Brochure. This section will also identify the date of our last annual Brochure update. We will ensure that you receive a summary of any material changes to this and subsequent Brochures within 120 days of the close of our business’ fiscal year end which is December 31. We will provide other ongoing disclosure information about material changes as they occur. We will also provide you with information on how to obtain the complete brochure. Currently, our Brochure can be requested at any time, without charge, by contacting Mickey Cargile at (432) 617-1394. 2  Item 3 Table of Contents Item 2 Material Changes ........................................................................................................................... 2 Item 3 Table of Contents ........................................................................................................................... 3 Item 4 Advisory Business .......................................................................................................................... 4 Item 5 Fees and Compensation ................................................................................................................ 5 Item 6 Performance-Based Fees and Side-by-Side Management ............................................................. 6 Item 7 Types of Clients ............................................................................................................................. 7 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss ........................................................ 7 Item 9 Disciplinary Information ................................................................................................................ 11 Item 10 Other Financial Industry Activities and Affiliations ...................................................................... 11 Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading ................ 11 Item 12 Brokerage Practices ................................................................................................................... 12 Item 13 Review of Accounts ................................................................................................................... 15 Item 14 Client Referrals and Other Compensation .................................................................................. 15 Item 15 Custody ...................................................................................................................................... 16 Item 16 Investment Discretion................................................................................................................. 17 Item 17 Voting Client Securities .............................................................................................................. 17 Item 18 Financial Information .................................................................................................................. 17 Item 19 Business Continuity Plan ........................................................................................................... 17 Item 20 Information Security Program ..................................................................................................... 18 3  Item 4 Advisory Business Firm Description Cargile Investment Management, Inc. ("Cargile Investment Management", "we," "our," and "us") is a registered investment adviser based in Midland, Texas. We are organized as a corporation under the laws of Texas. Mickey Cargile, President and Chief Compliance Officer is 100% shareholder of the firm. Mr. Cargile founded the firm in 1984, which has formerly operated under the entities Cargile Investments, Cargile Parker Investments, and WNB Private Client Services, LLP. The following paragraphs describe our services and fees. Refer to the description of each investment advisory service listed below for information on how we tailor our advisory services to the Client’s ("you," "your," and "client") individual needs. Portfolio Management Services The investment advice provided under our portfolio management services is tailored to our clients' needs and investment objectives. During the initial client onboarding the Client will select an investment policy from one of the following five categories: 1. Income 2. Growth 3. Moderate Growth 4. Income with Growth; or 5. Aggressive Growth Each investment policy will implement tactical and strategic asset allocation using no-load and/or load- waived mutual funds, exchange traded funds, and other liquid securities with the goal of compensating clients for the risks being taken. Refer to Item 8 of this brochure, Methods of Analysis, Investment Strategies and Risk of Loss, for additional disclosures on this topic. If you participate in our portfolio management services, we require you to grant our firm discretionary authority to manage your account. Discretionary authorization will allow us to determine the specific securities, and the amount of securities, to be purchased or sold for your account without your approval prior to each transaction. Discretionary authority is granted by the investment advisory agreement you sign with our firm and/or the appropriate trading authorization forms. You may limit our discretionary authority (for example, limiting the types of securities that can be purchased or sold for your account) by providing our firm with your restrictions and guidelines in writing. Types of Investments We primarily offer advice on Mutual Funds and ETFs. Refer to the Methods of Analysis, Investment Strategies and Risk of Loss below for additional disclosures on this topic. Additionally, we may advise you on various types of investments based on your needs. We may also provide advice on any type of investment held in your portfolio at the inception of our advisory relationship. 4  Funds Cargile Investment Management serves as the investment adviser to the Cargile Fund, (the "Mutual Fund") a non-diversified series of PFS Funds (the "Trust"). Mutual Fund The Trust is an open-end investment company established under the laws of Massachusetts. Cargile Investment Management has responsibility for the management of the Mutual Fund's affairs, under the supervision of the Trust's Board of Trustees. The Mutual Fund seeks to generate long-term capital appreciation under normal market conditions. The Mutual Fund invests primarily in exchange traded funds ("ETFs") and/or cash and cash equivalents. The prospectus for the Mutual Fund contains a complete description of the Mutual Fund, its strategies, objectives, costs, and risks. Before investing clients in the Mutual Fund, Cargile Investment Management will make a good faith determination about whether an investment would reasonably be appropriate by considering factors that may include but are not limited to the following: (1) the client's investment objectives; (2) the total amount of client assets currently being managed by Registrant; (3) the amount of anticipated future contributions that the client will make to the account(s) being managed by the Registrant; (4) the cost and efficiency of managing the client's assets including and excluding an investment in the Mutual Fund; and (5) the combined management fees and expense ratios of other non-affiliated mutual funds. Assets Under Management As of December 31, 2024, Cargile Investment Management had approximately $383,040,142 in discretionary assets under management for 152 clients. Item 5 Fees and Compensation Portfolio Management Services Our annual fee for portfolio management services varies between 0.10% to 2.0% depending upon the market value of your assets under our management, the type and complexity of the asset management services provided, as well as the level of administration requested either directly or assumed by the client. Assets in each of your account(s) are included in the fee assessment unless specifically identified in writing for exclusion. Our annual portfolio management fee is billed and payable, quarterly in arrears, based on the balance at end of billing period. Where you have authorized, we will deduct our fee directly from your account through the qualified custodian holding your funds and securities. We will deduct our advisory fee only when you have given our firm written authorization permitting the fees to be paid directly from your account. Further, the qualified custodian will deliver an account statement to you at least quarterly. These account statements will show all disbursements from your account. You should review all custodial statements and fee deductions for accuracy. If you find any inconsistent information between our portfolio management fee and the statement(s) you receive from the qualified custodian, call our main office number located on the cover page of this brochure. If the portfolio management agreement is executed at any time other than the first day of a calendar quarter, our fees will apply on a pro rata basis, which means that the advisory fee is payable in proportion to the number of days in the quarter for which you are a client. Our advisory fee is negotiable, depending on individual client circumstances. You may terminate the portfolio management agreement upon written notice. You will incur a pro rata charge for services rendered prior to the termination of the portfolio management agreement, which means you will incur advisory fees only in proportion to the number of days in the quarter for which you are a client. Cargile Investment Management reserves the right to stop work on any account that is more than 30 5  days overdue. In addition, Cargile Investment Management reserves the right to terminate any agreement where a client has willfully concealed or has refused to provide pertinent information about financial situations when necessary and appropriate, in Cargile Investment Management's judgment, to providing proper financial advice. Additional Fees and Expenses As part of our investment advisory services to you, we may invest, or recommend that you invest, in mutual funds and exchange traded funds. The fees that you pay to our firm for investment advisory services are separate and distinct from the fees and expenses charged by mutual funds or exchange traded funds (described in each fund's prospectus) to their shareholders. These fees will generally include a management fee and other fund expenses. You will also incur 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 whom your account transactions are executed. We do not share in any portion of the brokerage fees/transaction charges imposed by the broker-dealer or custodian. To fully understand the total cost you will incur, you should review all the fees charged by mutual funds, exchange traded funds, our firm, and others. For information on our brokerage practices, refer to the Brokerage Practices section of this brochure. Persons providing investment advice on behalf of our firm are licensed as insurance agents. These persons will earn commission-based compensation for selling insurance products, including insurance products they sell to you. Insurance commissions earned by these persons are separate from our advisory fees. This practice presents a conflict of interest because persons providing investment advice on behalf of Cargile Investment Management who are insurance agents have an incentive to recommend insurance products to you for the purpose of generating commissions rather than solely based on your needs. You are under no obligation, contractually or otherwise, to purchase insurance products through any person affiliated with our firm. Mutual Fund Mutual funds charge operating expenses and investment management fees. As described in the Mutual Fund prospectus, Cargile Investment Management receives a 1.00% management fee from the Mutual Fund based upon the amount of assets invested in the Mutual Fund. In addition, as also described in the Mutual Fund prospectus, Cargile Investment Management receives an additional fee of 0.65% of the Fund’s average daily net assets up to $25 million, 0.35% of the Fund’s average daily net assets from $25 million to $100 million, and 0.25% of such assets in excess of $100 million and is obligated to pay the operating expenses of the Fund excluding management fees, brokerage fees and commissions, 12b-1 fees (if any), taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), ADR fees, the cost of acquired funds and extraordinary expenses. Effective November 1, 2021, the Adviser has contractually agreed to waive Services Agreement fees by 0.10% of its average daily net assets through October 31, 2022. Cargile Investment Management will waive its investment advisory fee described in Portfolio Management Services above with respect to any client assets invested in the Mutual Fund. Accordingly, Cargile Investment Management will only receive one layer of management fees—the investment management fee payable by the Mutual Fund. The client may direct Cargile Investment Management, in writing at any time, not to exercise its discretionary authority to place client assets in the Mutual Fund. The Chief Compliance Officer of the Mutual Fund, Julian Winters, remains available to address any questions regarding the above and any perceived conflict of interest. Item 6 Performance-Based Fees and Side-by-Side Management We do not charge performance fees nor provide side-by-side management of client accounts. 6  Item 7 Types of Clients Description Cargile Investment Management generally offers investment advice to individuals, high net worth individuals, pension and profit-sharing plans, State or municipal government entities, trusts, estates, or charitable organizations, corporations and registered investment companies. Client relationships vary in scope and length of service. Account Minimums The minimum annual account fee is $1,500.00. The minimum may be waived at the firm's sole discretion. Cargile Investment Management retains the discretion to waive the account minimum. Smaller accounts may be established when the client and the advisor anticipate the client will add additional funds to the account(s). Other exceptions will apply to employees of Cargile Investment Management and their relatives, or relatives of existing clients. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss Methods of Analysis Security analysis methods may include charting, fundamental analysis, technical analysis, and cyclical analysis. Charting Analysis - involves the gathering and processing of price and volume pattern information for a particular security, sector, broad index or commodity. This price and volume pattern information is analyzed. The resulting pattern and correlation data are used to detect departures from expected performance and diversification and predict future price movements and trends. Risk: Our charting analysis may not accurately detect anomalies or predict future price movements. Current prices of securities may reflect all information known about the security and day-to-day changes in market prices of securities may follow random patterns and may not be predictable with any reliable degree of accuracy. Technical Analysis - involves studying past price patterns, trends and interrelationships in the financial markets to assess risk-adjusted performance and predict the direction of both the overall market and specific securities. Risk: The risk of market timing based on technical analysis is that our analysis may not accurately detect anomalies or predict future price movements. Current prices of securities may reflect all information known about the security and day-to-day changes in market prices of securities may follow random patterns and may not be predictable with any reliable degree of accuracy. 7  Fundamental Analysis - involves 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 and its industry. The resulting data is used to measure the true value of the company's stock compared to the current market value. Risk: The 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. Investment Strategies Cargile Investment Management may use a strategic asset allocation utilizing a core and satellite approach. This means that we use passively managed index and exchange-traded funds as the core investments, and then add actively-managed funds where there are greater opportunities to make a difference. Portfolios are diversified in an attempt to control the risk associated with traditional markets. The investment strategy for a specific client is selected during the initial client onboarding. The client may change this investment strategy at any time. Each new client executes an investment advisory agreement that documents their desired investment strategy. Our strategies include long-term and short-term purchases. Recommendation of Particular Types of Securities We primarily recommend investment in mutual funds and exchange traded funds ("ETF"). However, we may advise on other liquid and exchange-traded securities as appropriate. Each type of security has its own unique set of risks associated with it and it would not be possible to list here all the specific risks of every type of investment. Even within the same type of investment, risks can vary widely. However, in very general terms, the higher the anticipated return of an investment, the higher the risk of loss associated with the investment. Mutual funds and ETFs are professionally managed collective investment systems that pool money from many investors and invest in stocks, bonds, short-term money market instruments, other mutual funds, other securities, or any combination thereof. The fund will have a manager that trades the fund's investments in accordance with the fund's investment objective. While mutual funds and ETFs generally provide diversification, risks can be significantly increased if the fund is concentrated in a particular sector of the market, primarily invests in small cap or speculative companies, uses leverage (i.e., borrows money) to a significant degree, or concentrates in a particular type of security (i.e., 8  equities) rather than balancing the fund with different types of securities. ETFs differ from mutual funds since they can be bought and sold throughout the day like stock and their price can fluctuate throughout the day. The returns on mutual funds and ETFs can be reduced by the costs to manage the funds. Also, while some mutual funds are "no load" and charge no fee to buy into, or sell out of, the fund, other types of mutual funds do charge such fees which can also reduce returns. Mutual funds can also be "closed end" or "open end". So-called "open end" mutual funds continue to allow in new investors indefinitely whereas "closed end" funds have a fixed number of shares to sell which can limit their availability to new investors. ETFs may have tracking error risks. For example, the ETF investment adviser may not be able to cause the ETF's performance to match that of its Underlying Index or other benchmark, which may negatively affect the ETF's performance. In addition, for leveraged and inverse ETFs that seek to track the performance of their Underlying Indices or benchmarks daily, mathematical compounding may prevent the ETF from correlating with performance of its benchmark. In addition, an ETF may not have investment exposure to all the securities included in its Underlying Index, or its weighting of investment exposure to such securities may vary from that of the Underlying Index. Some ETFs may invest in securities or financial instruments that are not included in the Underlying Index, but which are expected to yield similar performance. Risk of Loss All investment programs, including the investment program of the Mutual Fund , have certain risks that are borne by the investor. Our investment approach constantly keeps the risk of loss in mind. Investors face the following investment risks: • Interest-rate Risk: Fluctuations in interest rates may cause investment prices to fluctuate. For example, when interest rates rise, yields on existing bonds become less attractive, causing their market values to decline. • • Market Risk: The price of a security, bond, or mutual fund may drop in reaction to tangible and intangible events and conditions. This type of risk is caused by external factors independent of a security's particular underlying circumstances. For example, political, economic and social conditions may trigger market events. Inflation Risk: When any type of inflation is present, a dollar today will not buy as much as a dollar next year, because purchasing power is eroding at the rate of inflation. • Currency Risk: Overseas investments are subject to fluctuations in the value of the dollar against the currency of the investment's originating country. This is also referred to as exchange rate risk. • Reinvestment Risk: This is the risk that future proceeds from investments may have to be reinvested at a potentially lower rate of return (i.e. interest rate). This primarily relates to fixed income securities. • Business Risk: These risks are associated with a particular industry or a particular company within an industry. For example, oil-drilling companies depend on finding oil and then refining it, a lengthy process, before they can generate a profit. They carry a higher risk of profitability than an electric company, which generates its income from a steady stream of customers who buy electricity no matter what the economic environment is like. • Liquidity Risk: Liquidity is the ability to readily convert an investment into cash. Generally, assets are more liquid if many traders are interested in a standardized product. For example, Treasury Bills are highly liquid, while real estate properties are not. • Financial Risk: Excessive borrowing to finance a business' operations increases the risk of profitability, because the company must meet the terms of its obligations in good times and bad. During periods of financial stress, the inability to meet loan obligations may result in bankruptcy and/or a declining market value. 9  • . 10  • Item 9 Disciplinary Information We are required to disclose any regulatory or disciplinary events that are material to a client's or prospective client's evaluation of our advisory business or the integrity of our management. On September 30, 2019, the SEC published IA Release No. 5389, an Order instituting Administrative and Cease and Desist Proceedings, pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 ("Advisers Act"), against Cargile Investment Management, Inc. Cargile Investment Management self-reported the violations to the SEC. The proceedings arose out of alleged breaches of fiduciary duty and inadequate disclosures by Cargile Investment Management in connection with its mutual fund share class selection practices and the 12b-1 fees Cargile Investment Management and/or its associated persons received. At times during the relevant period, Cargile Investment Management purchased for, recommended to, or held for advisory clients’ mutual fund share classes that charged 12b-1 fees instead of lower-cost share classes of the same funds for which the clients were eligible. Cargile Investment Management failed to disclose in its Form ADV or otherwise conflicts of interest related to the collection of such fees. As a result of the conduct, Cargile Investment Management willfully violated Sections 206(2) and 207 of the Advisers Act. Cargile Investment Management agreed to cease and desist from committing or causing any violations and any future violations of Sections 206(2) and 207 of the Advisers Act. Cargile Investment Management was censured, agreed to pay disgorgement plus interest of $70,141.47 and shall comply with the undertakings described in the Offer of Settlement. We are not aware of any other events warranting a materiality evaluation or disclosure in accordance with Rule 204-2(a)(14)(iii). Item 10 Other Financial Industry Activities and Affiliations Neither Cargile Investment Management nor any of its management persons are registered as a broker-dealer or registered as a representative of a broker-dealer, nor does it have any pending application to register. In addition, neither Cargile Investment Management nor its management persons are affiliated with any broker-dealer. . Persons providing investment advice on behalf of our firm are licensed as insurance agents. These persons will earn commission-based compensation for selling insurance products, including insurance products they sell to you. Insurance commissions earned by these persons are separate from our advisory fees. See the Fees and Compensation section in this brochure for more information on the compensation received by insurance agents who are affiliated with our firm. Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Code of Ethics The employees of Cargile Investment Management have committed to a Code of Ethics that is available for review by clients and prospective clients upon request. The firm will provide a copy of the Code of Ethics to any client or prospective client upon request. Participation or Interest in Client Transactions Cargile Investment Management and its employees may buy or sell securities that are also held by 11  clients. Employees may not trade their own securities ahead of client trades. Employees comply with the provisions of the Cargile Investment Management Compliance Manual and Code of Ethics. Personal Trading The Chief Compliance Officer of Cargile Investment Management is Mickey Cargile. He reviews all employee trades each quarter. The personal trading reviews ensure that the personal trading of employees does not affect the markets, and that clients of the firm receive preferential treatment. Since most employee trades are small mutual fund trades or exchange-traded fund trades, the trades do not affect the securities markets. Item 12 Brokerage Practices Selecting Brokerage Firms Cargile Investment Management has authority over the selection and amount of securities to be bought or sold, the broker or dealer to be used and the commission rates to be paid. We do not allow clients to direct us to execute transactions through a specified broker-dealer, but require the brokerage and custodial services of National Financial Services and/or Charles Schwab (whether one or more "Custodian"). Your assets must be maintained in an account at a "qualified custodian," generally a broker-dealer or bank. In recognition of the value of the services the Custodian provides, you may pay higher commissions and/or trading costs than those that may be available elsewhere. The brokerage practices for Mutual Fund Clients are disclosed in the respective Mutual Fund's statement of additional information. Consistent with our obligation to seek best execution, we may aggregate trade orders for clients (including the Investment Funds) when in our judgement such aggregation would result in administrative convenience or an overall economic benefit to the Partnership based on an evaluation that the Partnership is benefited by relatively better purchase or sale prices, lower commission expenses or beneficial timing of transactions or a combination of these and other factors, the Investment Manager may place "bunched orders" with respect to such trades. While Cargile Investment Management generally makes portfolio decisions for similarly situated clients on an aggregated basis, it is not required to do so. We manage clients that may pursue one or more investment strategies and objectives. Allocations of investment opportunities among clients must be made in a fair and equitable manner. Best Execution We seek to recommend a custodian/broker that will hold your assets and execute transactions on terms that are, overall, the most favorable compared to other available providers and their services. We consider various factors, including: • Capability to buy and sell securities for your account itself or to facilitate such services. • The likelihood that your trades will be executed. • Availability of investment research and tools. • Overall quality of services. • Competitiveness of price. • Reputation, financial strength, and stability. • Existing relationship with our firm and our other clients. Cargile Investment Management reviews the execution of trades at each custodian each quarter. The review is documented as required by the Cargile Investment Management Compliance Manual. Trading fees charged by the custodians are also reviewed on a quarterly basis. 12  Soft Dollars Cargile Investment Management does not receive soft dollars. Economic Benefits As a registered investment adviser, we have access to the institutional platform of your account custodian. As such, we will also have access to research products and services from your account custodian and/or other brokerage firm. These products may include financial publications, information about companies and industries, research software, and other products or services that provide lawful and appropriate assistance to our firm in the performance of our investment decision-making responsibilities. Such research products and services are provided to all investment advisers that utilize the institutional services platforms of these firms and are not considered to be paid for with soft dollars. However, you should be aware that the commissions charged by a particular broker for a particular transaction or set of transactions may be greater than the amounts another broker who did not provide research services or products might charge. Brokerage for Client Referrals We do not receive client referrals from broker-dealers in exchange for cash or other compensation, such as brokerage services or research. Order Aggregation We may aggregate trades at our discretion. Aggregated trades are allocated at an average price to all clients subject to the aggregation. Schwab - Your Custody and Brokerage Costs For our clients' accounts it maintains, Schwab generally does not charge you separately for custody services but is compensated by charging you commissions or other fees on trades that it executes or that settle into your Schwab account. In addition to commission rates and/or asset-based fees Schwab charges you a flat dollar amount as a "prime broker" or "trade away" fee for each trade that we have executed by a different broker-dealer but where the securities bought or the funds from the securities sold are deposited (settled) into your Schwab account. These fees are in addition to the commissions or other compensation you pay the executing broker-dealer. Because of this, in order to minimize your trading costs, we have Schwab execute most trades for your account. Schwab Adviser Services Schwab Advisor Services (formerly called Schwab Institutional) is Schwab's business serving independent investment advisory firms like us. They provide us and our clients with access to its institutional brokerage - trading, custody, reporting and related services - many of which are not typically available to Schwab retail customers. Schwab also makes available various support services. Some of those services help us manage or administer our clients' accounts while others help us manage and grow our business. Schwab's support services are generally available on an unsolicited basis (we don't have to request them) and at no charge to us. Services that Benefit You Schwab's institutional brokerage services include access to a broad range of investment products, execution of securities transactions, and custody of client assets. The investment products available through Schwab include some to which we might not otherwise have access or that would require a significantly higher minimum initial investment by our clients. Schwab's services described in this paragraph generally benefit you and your account. Services that May Not Directly Benefit You Schwab also makes available to us other products and services that benefit us but may not directly benefit you or your account. These products and services assist us in managing and administering our clients' accounts. They include investment research, both Schwab's own and that of third parties. We 13  may use this research to service all or some substantial number of our clients' accounts, including accounts not maintained at Schwab. In addition to investment research, Schwab also makes available software and other technology that: • provide access to client account data (such as duplicate trade confirmations and account statements); facilitate trade execution and allocate aggregated trade orders for multiple client accounts; facilitate payment of our fees from our clients' accounts; and • • provide pricing and other market data; • • assist with back-office functions, recordkeeping and client reporting. Services that Generally Benefit Only Us Schwab also offers other services intended to help us manage and further develop our business enterprise. These services include: technology, compliance, legal, and business consulting; • educational conferences and events; • • publications and conferences on practice management and business succession; and • access to employee benefits providers, human capital consultants and insurance providers. Schwab may provide some of these services itself. In other cases, it will arrange for third-party vendors to provide the services to us. Schwab may also discount or waive its fees for some of these services or pay all or a part of a third party's fees. Schwab may also provide us with other benefits such as occasional business entertainment of our personnel. Our Interest in Schwab's Services The availability of these services from Schwab benefits us because we do not have to produce or purchase them. 14  These arrangements give us an incentive to recommend that you maintain your account with Schwab based on our interest in receiving Schwab's services that benefit our business rather than based on your interest in receiving the best value in custody services and the most favorable execution of your transactions. This is a potential conflict of interest. We believe, however, that our selection of Schwab as custodian and broker is in the best interests of our clients. It is primarily supported by the scope, quality and price of Schwab's services (based on the factors discussed above) and not Schwab's services that benefit only us. We do not believe that maintaining our client's assets at Schwab for services presents a material conflict of interest. Item 13 Review of Accounts Periodic Reviews Mickey Cargile, President/Chief Compliance Officer, and the Senior Portfolio Manager(s) monitors investment strategies and reviews all transactions on a daily basis. Reviews are performed more frequently when market conditions dictate, as well as when requested by the client. Clients may request a dedicated account review to discuss their account and investments at any time. Review Triggers Other conditions that may trigger a review are changes in the tax laws, new investment information, and changes in a client's situation. Regular Reports We will not provide you with regular written reports. You will receive trade confirmations and monthly or quarterly statements from your account custodian(s). Item 14 Client Referrals and Other Compensation Incoming Referrals Cargile Investment Management has been fortunate to receive many client referrals over the years. The referrals came from current clients, bankers, estate planning attorneys, accountants, employees, personal friends of employees and other similar sources. The firm does not compensate referring parties for these referrals. Referrals Out Cargile Investment Management does not accept referral fees or any form of remuneration from other professionals when a prospect or client is referred to them. 15  Charles Schwab & Co., Inc. - Institutional We receive an economic benefit from Schwab in the form of the support products and services it makes available to us and other independent investment advisors whose clients maintain their accounts at Schwab. These products and services, how they benefit us, and the related conflicts of interest are described above (see Item 12 - Brokerage Practices). The availability to us of Schwab's products and services is not based on us giving particular investment advice, such as buying particular securities for our clients. Item 15 Custody Fee Deductions All assets are held at qualified custodians. As paying agent for our firm, your independent custodian will directly debit your account(s) for the payment of Cargile Investment Management's advisory fees. This ability to deduct our advisory fees from your accounts causes our firm to exercise limited custody over your funds or securities. We do not have physical custody of any of your funds and/or securities. Your assets will be maintained by an unaffiliated, qualified custodian. Your assets are not held by our firm or any associate of our firm. The custodian provides no less than quarterly account statements directly to clients at their address of record. The account statements from your custodian(s) will indicate the amount of our advisory fees deducted from your account(s) each billing period. You should carefully review account statements for accuracy. Performance Reports Clients are urged to compare the account statements received directly from their custodians to any report provided by Cargile Investment Management. Standing Letter of Authorization At the request of the client, Cargile Investment Management, or persons associated with our firm, will effect transfers from client accounts to one or more third parties as designated in writing by the client. This transfer can be completed without Cargile Investment Management obtaining written client consent for each separate, individual transaction, if the client has provided us with written authorization to do so. Such written authorization is known as a Standing Letter of Authorization. An adviser with authority to conduct such third-party transfers has access to the client's assets, and therefore has custody of the client's assets in any related accounts. However, we do not have to obtain a surprise annual audit, as we otherwise would be required to by reason of having custody, as long as we meet the following criteria: 1. You provide a written, signed instruction to the qualified custodian that includes the third party's name and address or account number at a custodian; 2. You authorize us in writing to direct transfers to the third party either on a specified schedule or from time to time; 3. Your qualified custodian verifies your authorization (e.g., signature review) and provides a transfer of funds notice to you promptly after each transfer; 4. You can terminate or change the instruction; 5. We have no authority or ability to designate or change the identity of the third party, the address, or any other information about the third party; 6. We maintain records showing that the third party is not a related party to us nor located at the same address as us; and 7. Your qualified custodian sends you, in writing, an initial notice confirming the instruction and an annual notice reconfirming the instruction. 16  Item 16 Investment Discretion Discretionary Authority for Trading Cargile Investment Management accepts discretionary authority, by way of the executed investment advisory agreement, to manage securities accounts on behalf of clients. With discretionary authority, Cargile Investment Management has the authority to determine, without obtaining specific client consent, the securities to be bought or sold, and the amount of the securities to be bought or sold. Before we can buy or sell securities on your behalf, you must first sign our discretionary investment advisory agreement and/or the appropriate trading authorization forms. As investment adviser to the Investment Funds, Cargile Investment Management is granted discretionary authority in the relevant organizational documents and/or advisory agreements to determine which investments to make and the amounts of the investments to be made on behalf of the Investment Funds. Our investment decisions and advice with respect to each Investment Fund are subject to each Investment Fund's investment objectives and guidelines, as set forth in its offering documents. Cargile Investment Management will consult with a client prior to each trade to obtain concurrence if discretionary authority has not been granted. Discretionary trading authority facilitates placing trades in your accounts on your behalf so that we may implement and maintain the investment strategy that you have approved in writing. Item 17 Voting Client Securities Proxy Votes Cargile Investment Management does not vote proxies on securities for individual Clients. Clients are expected to vote their own proxies. When assistance on voting proxies is requested, Cargile Investment Management will provide advice Clients to vote "abstain". If a conflict of interest exists, it will be disclosed to the Client. The proxy voting guidelines for Investment Fund investors can be found in the respective statement of additional information and/or offering or organizational documents. Item 18 Financial Information Financial Condition Cargile Investment Management does not have any financial impairment that will preclude the firm from meeting contractual commitments to clients. A balance sheet is not required to be provided because Cargile Investment Management does not serve as a custodian for client funds or securities, and does not require prepayment of fees of more than $1,200 per client, and six months or more in advance. Item 19 Business Continuity Plan General Cargile Investment Management has a Business Continuity Plan in place that provides detailed steps 17  to mitigate and recover from the loss of office space, communications, services or key people. Disasters The Business Continuity Plan covers natural disasters such as snowstorms, hurricanes, tornadoes, and flooding. The Plan covers man-made disasters such as loss of electrical power, loss of water pressure, fire, bomb threat, nuclear emergency, chemical event, biological event, T-1 communications line outage, Internet outage, railway accident and aircraft accident. Electronic files are backed up daily and archived offsite. Alternate Offices Alternate offices are identified to support ongoing operations in the event the main office is unavailable. It is our intention to contact all clients within five days of a disaster that dictates moving our office to an alternate location. Loss of Key Personnel Cargile Investment Management maintains a Business Continuation plan that addresses the loss of key personnel including Mickey Cargile. Item 20 Information Security Program Information Security Cargile Investment Management maintains an information security program to reduce the risk that your personal and confidential information may be breached. Privacy Notice Cargile Investment Management is committed to maintaining the confidentiality, integrity and security of the personal information that is entrusted to us. The categories of nonpublic information that we collect from you may include information about your personal finances, information about your health to the extent that it is needed for the financial planning process, information about transactions between you and third parties, and information from consumer reporting agencies, e.g., credit reports. We use this information to help you meet your personal financial goals. With your permission, but only with your permission, we may disclose limited information to attorneys, accountants, and mortgage lenders with whom you have established a relationship. You may opt out from our sharing information with these nonaffiliated third parties by notifying us at any time by telephone at 432-617-1394, mail, fax 432-570-8117, email Mickey@CargileInvestments.com or in person. With your permission, we share a limited amount of information about you with your brokerage firm in order to execute securities transactions on your behalf. We maintain a secure office to ensure that your information is not placed at unreasonable risk. We employ a firewall barrier, secure data encryption techniques and authentication procedures in our computer environment. We do not provide your personal information to mailing list vendors or solicitors. We require strict confidentiality in our agreements with unaffiliated third parties that require access to your personal information, including financial service companies, consultants, and auditors. Federal and state securities regulators may review our Company records and your personal records as permitted by law. Personally identifiable information about you will be maintained while you are a client, and for the 18  required period thereafter that records are required to be maintained by federal and state securities laws. After that time, information may be destroyed. We will notify you in advance if our privacy policy is expected to change. We are required by law to deliver this Privacy Notice to you annually, in writing. 19