KENNON FINANCIAL

Item 1 Cover Page Kennon Financial 1 South School Avenue, Penthouse Suite Sarasota, FL 34237 www.kennonfinancial.com March 2, 2026 This brochure provides information about the qualifications and business practices of Kennon Financial. If you have any questions about the contents of this brochure, please contact us at 941-556-6307. 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 a registered investment advisor does not imply a certain level of skill or training. Additional information about Kennon Financial also is available on the SEC’s website at http://www.adviserinfo.sec.gov/.  Item 2 Material Changes There have been no material changes to this Brochure since the date of the last annual update noted below. The material changes discussed above are only those changes that have been made to this Brochure since the firm’s last annual update of the Brochure. The date of the last annual update of the Brochure was March 17, 2025. Kennon Financial Page ii  Item 3 Table of Contents Item 1 Cover Page .................................................................................................................................. i Item 2 Material Changes ....................................................................................................................... ii Item 3 Table of Contents ..................................................................................................................... iii Item 4 Advisory Business ..................................................................................................................... 4 Item 5 Fees and Compensation ............................................................................................................. 4 Item 6 Performance-Based Fees and Side-by-Side Management ......................................................... 5 Item 7 Types of Clients ......................................................................................................................... 5 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss ................................................. 6 Item 9 Disciplinary Information ........................................................................................................... 9 Item 10 Other Financial Industry Activities and Affiliations ............................................................... 9 Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading ........ 10 Item 12 Brokerage Practices ............................................................................................................... 11 Item 13 Review of Accounts ............................................................................................................... 14 Item 14 Client Referrals and Other Compensation ............................................................................. 15 Item 15 Custody .................................................................................................................................. 15 Item 16 Investment Discretion ............................................................................................................ 15 Item 17 Voting Client Securities ......................................................................................................... 15 Item 18 Financial Information ............................................................................................................ 16 Kennon Financial Page iii  Item 4 Advisory Business Kennon Financial is an investment advisor firm registered with the U.S. Securities and Exchange Commission (“SEC”) since April 2019. The principal owner of Kennon Financial is David R. Kennon, CEO and CCO. Advisory Services Kennon Financial’s (“Advisor”) principal service is providing fee-based investment advisory services. The Advisor practices custom management of portfolios, on a discretionary basis, according to the client’s objectives. The Advisor’s primary approach is to use a tactical allocation strategy aimed at reducing risk and increasing performance. While the Advisor can advise on any investment asset, its investment recommendations are primarily related to investments in exchange traded funds (ETFs). The Advisor may recommend, on occasion, redistributing investment allocations to diversify the portfolio in an effort to reduce risk and increase performance. The Advisor may recommend specific funds to increase sector weighting and/or dividend potential. The Advisor may recommend employing cash positions as a possible hedge against market movement which may adversely affect the portfolio. The Advisor may recommend selling positions for reasons that include, but are not limited to, harvesting capital gains or losses, business or sector risk exposure to a specific security or class of securities, overvaluation or overweighting of the position(s) in the portfolio, change in risk tolerance of client, or any risk deemed unacceptable for the client’s risk tolerance. Kennon Financial will tailor its advisory services to its client’s individual needs based on meetings and conversations with the client. If clients wish to impose certain restrictions on investing in certain securities or types of securities, the Advisor will address those restrictions with the client to have a clear understanding of the client’s requirements. Kennon Financial does not provide portfolio management services to wrap fee programs. As of December 31, 2025, Kennon Financial had $306,000,000 in discretionary, and no non- discretionary, client assets under management. Item 5 Fees and Compensation Asset Management Fees Pursuant to an Investment Advisory contract signed by each client, the client will pay Kennon Financial an annual management fee, payable quarterly in advance, based on the value of portfolio assets of the account managed by the Advisor as of the opening of business on the first business day of each quarter. The management fee may be adjusted to account for significant contributions or withdrawals made to the account during the quarter. New account fees will be prorated from the inception of the account to the end of the first quarter. Management fees range up to 1.00% per annum depending on the type and complexity of the investment management strategy employed as well as the size of the account or overall client relationship. Management fees may be reduced or waived for directors, officers, and employees Kennon Financial Page 4  of Kennon Financial at the discretion of management. These fees may be negotiated by Kennon Financial at its sole discretion. The client will give written authorization permitting the Advisor to be paid directly from their account held by the custodian. The custodian will send a statement at least quarterly to the client. Where it is not practical to deduct fees directly from client accounts, client will be sent an invoice on a quarterly basis for any outstanding advisory fees due. The invoice is due within five days of receipt by client. All fees paid to Kennon Financial for investment advisory services are separate and distinct from the expenses charged by ETFs to their shareholders. These fees and expenses are described in each fund’s prospectus. These fees will generally include a management fee and other fund expenses. At no time will Kennon Financial accept or maintain custody of a client’s funds or securities except for authorized fee deduction. Client is responsible for all custodial and securities execution fees charged by the custodian and executing broker-dealer. The Advisor’s fee is separate and distinct from the custodian and execution fees. Kennon Financial’s management fee is payable in advance. Upon termination, any fees paid in advance will be prorated to the date of termination and any unearned fees will be refunded to client. Where acting in the capacity of an insurance agent, investment advisor representatives of Kennon Financial may effect insurance product transactions for typical and customary compensation. Clients are not obligated to use investment advisor representatives of Kennon Financial to execute such insurance transactions. This practice presents a conflict of interest by creating an incentive to recommend investment products based on the compensation received, rather than on a client’s needs. Where client chooses to purchase insurance products through Kennon Financial, there is no advisory fee associated with these insurance products, and clients will be made aware of all commissions associated with the products prior to the transactions. A client may be able to invest in products recommended by the firm directly, without the services of Kennon Financial. In that case, the client would not receive the services provided by Kennon Financial which are designed, among other things, to assist the client in determining which products or services are most appropriate to each client’s financial condition and objectives. Kennon Financial does not expect commissions from insurance transactions to constitute more than 50% of Firm revenues. Item 6 Performance-Based Fees and Side-by-Side Management Kennon Financial does not charge performance-based fees. Item 7 Types of Clients The Advisor generally will offer its services to individuals and does not have any minimum requirements for opening or maintaining an account. Kennon Financial Page 5  Item 8 Methods of Analysis, Investment Strategies and Risk of Loss The Advisor may utilize fundamental, technical or cyclical analysis techniques in formulating investment advice or managing assets for clients. Fundamental analysis of businesses involves analyzing its financial statements and health, its management and competitive advantages and its competitors and markets. Fundamental analysis is performed on historical and present data but with the goal of making financial forecasts. There are several possible objectives; to conduct a company stock valuation and predict its probable price evolution; to make a projection on its business performance; to evaluate its management and make internal business decisions and to calculate its credit risk. Technical analysis is a method of evaluating securities by relying on the assumption that market data, such as charts of price, volume and open interest can help predict future (usually short-term) market trends. Technical analysis assumes that market psychology influences trading in a way that enables predicting when a stock will rise or fall. Cyclical analysis of economic cycles is used to determine how these cycles affect the returns of an investment, an asset class or an individual company’s profits. Cyclical risks exist because the broad economy has been shown to move in cycles, from periods of peak performance followed by a downturn, then a trough of low activity. Between the peak and trough of a business or other economic cycle, investments may fall in value to reflect the uncertainty surrounding future returns as compared with the recent past. The Advisor will primarily implement a long-term purchase investment strategy (securities held at least for one year) for client accounts. Clients need to be aware that investing in securities involves risk of loss that clients need to be prepared to bear. The methods of analysis and investment strategies followed by the Advisor are utilized across all of the Advisors clients, as applicable. One method of analysis or investment strategy is not more significant than the other as the Advisor is considering the client’s portfolio, risk tolerance, time horizon and individual goals. However, the client should be aware that with any trading that occurs in the client account, the client will incur transaction and administrative costs. Investing includes the risk that the value of an investment can be negatively affected by factors specifically related to the investment (e.g., capability of management, competition, new inventions by other companies, lawsuits against the company, labor issues, patent expiration, etc.), or to factors related to investing and the markets in general (e.g., the economy, wars, civil unrest or terrorism around the world, concern about oil prices or unemployment, etc.). Risks of fundamental analysis may include risks that market actions, natural disasters, government actions, world political events or other events not directly related to the price or valuation of a specific company’s fundamental analysis can adversely impact the stock price of a company Kennon Financial Page 6  causing a portfolio containing that security to lose value. Risks may also include that the historical data and projections on which the fundamental analysis is performed may not continue to be relevant to the operations of a company going forward, or that management changes or the business direction of management of the company may not permit the company to continue to produce metrics that are consistent with the prior company data utilized in the fundamental analysis, which may negatively affect the Advisor’s estimate of the valuation of the company. In cyclical analysis, economic or business cycles may not be predictable and may have many fluctuations between long-term expansions and contractions. Also, the lengths of the economic cycles may be difficult to predict with accuracy. Therefore, the risk of cyclical analysis is the difficulty in predicting economic trends and consequently the changing value of securities that would be affected by these changing trends. The primary risks in technical analysis are that the factors used to analyze the price, trends and volatility of a security may not be replicated, or the outcomes of such analysis will not be the same as in past periods where similar combinations existed. Because of the reliance on trends, technical analysis can signal buying at market peaks and selling at market troughs. All investments involve some degree of risk. In finance, risk refers to the degree of uncertainty and/or potential financial loss inherent in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks. Every saving and investment product have different risks and returns. Differences include how readily investors can get their money when they need it, how fast their money will grow, and how safe their money will be. The primary risks faced by investors include: Business Risk With a stock, you are purchasing a piece of ownership in a company. With a bond, you are loaning money to a company. Returns from both of these investments require that that the company stays in business. If a company goes bankrupt and its assets are liquidated, common stockholders are the last in line to share in the proceeds. If there are assets, the company’s bondholders will be paid first, then holders of preferred stock. If you are a common stockholder, you get whatever is left, which may be nothing. The business risk in purchasing an annuity is that the financial strength of the insurance company issuing the annuity may decline and not be able to pay out the annuity obligation. Volatility Risk Even when companies aren’t in danger of failing, their stock price may fluctuate up or down. Large company stocks as a group, for example, have lost money on average about one out of every three years. A stock’s price can be affected by factors inside the company, such as a faulty product, or by events the company has no control over, such as political or market events. Kennon Financial Page 7  Inflation Risk Inflation is a general upward movement of prices. Inflation reduces purchasing power, which is a risk for investors receiving a fixed rate of interest. The principal concern for individuals investing in cash equivalents is that inflation will erode returns. Interest Rate Risk Interest rate changes can affect a bond’s value. If bonds are held to maturity the investor will receive the face value, plus interest. If sold before maturity, the bond may be worth more or less than the face value. Rising interest rates will make newly issued bonds more appealing to investors because the newer bonds will have a higher rate of interest than older ones. To sell an older bond with a lower interest rate, you might have to sell it at a discount. Liquidity Risk This refers to the risk that investors won’t find a market for their securities, potentially preventing them from buying or selling when they want. This can be the case with the more complicated investment products. It may also be the case with products that charge a penalty for early withdrawal or liquidation such as a certificate of deposit (CD). The Advisor primarily recommends the use of ETFs to construct client portfolios. Following are material risks associated with ETFs. Every type of investment, including ETFs, involves risk. Risk refers to the possibility that you will lose money (both principal and any earnings) or fail to make money on an investment. A fund's investment objective and its holdings are influential factors in determining how risky a fund is. Reading the prospectus will help you to understand the risk associated with that particular fund. Generally speaking, risk and potential return are related. This is the risk/return trade-off. Higher risks are usually taken with the expectation of higher returns at the cost of increased volatility. While a fund with higher risk has the potential for higher return, it also has the greater potential for losses or negative returns. The school of thought when investing in ETFs suggests that the longer your investment time horizon is the less affected you should be by short-term volatility. Therefore, the shorter your investment time horizon, the more concerned you should be with short-term volatility and higher risk. ETF Risks In addition to the above risks, ETFs may include exposure to the following risks: • Tax Risk. The possibility that in-kind exchanges of the underlying fund assets will result in capital gains tax paid by the fund participants, and not by the manager of the fund, meaning the participants will not receive capital gains distributions at the end of the year. Conversely, in situations where like-kind exchanges are not authorized, participants may receive unwanted capital gains distributions. • Trading Risk. Due to their inherent liquidity and ease of trading on active exchanges, the possibility of taking on an active trading mindset and trying to time the market. Regular trading adds costs to the portfolio, thus eliminating the benefit of low ETF fees. Kennon Financial Page 8  • Call Risk. The possibility that falling interest rates will cause a bond issuer to redeem—or call—its high-yielding bond before the bond's maturity date. • Country Risk. The possibility that political events (a war, national elections), financial problems (rising inflation, government default), or natural disasters (an earthquake, a poor harvest) will weaken a country's economy and cause investments in that country to decline. • Credit Risk. The possibility that a bond issuer will fail to repay interest and principal in a timely manner. Also called default risk. • • • • • Currency Risk. The possibility that returns could be reduced for Americans investing in foreign securities because of a rise in the value of the U.S. dollar against foreign currencies. Also called exchange-rate risk. Income Risk. The possibility that a fixed-income fund's dividends will decline as a result of falling overall interest rates. Industry Risk. The possibility that a group of stocks in a single industry will decline in price due to developments in that industry. Inflation Risk. The possibility that increases in the cost of living will reduce or eliminate a fund's real inflation-adjusted returns. Interest Rate Risk. The possibility that a bond fund will decline in value because of an increase in interest rates. • Manager Risk. The possibility that an actively managed fund's investment adviser will fail to execute the fund's investment strategy effectively resulting in the failure of stated objectives. • Market Risk. The possibility that stock fund or bond fund prices overall will decline over short or even extended periods. Stock and bond markets tend to move in cycles, with periods when prices rise and other periods when prices fall. • Principal Risk. The possibility that an investment will go down in value, or "lose money," from the original or invested amount. Item 9 Disciplinary Information Neither Kennon Financial nor its management persons have had any legal or disciplinary events, currently or in the past. Item 10 Other Financial Industry Activities and Affiliations Neither Kennon Financial nor any of its management persons are registered, or have an application pending to register, as a broker-dealer or a registered representative of a broker-dealer. Neither Kennon Financial nor any of its management persons are registered or have an application pending to register, as a futures commission merchant, commodity pool operator, a commodity trading advisor, or an associated person of the foregoing entities. Kennon Financial does not currently have any relationships or arrangements that are material to its advisory business or clients with either a broker-dealer, municipal securities dealer, or government securities dealer or broker, investment company or other pooled investment vehicle (including a mutual fund, closed-end investment company, unit investment trust, private investment company or “hedge fund” and offshore fund), other investment advisor or financial Kennon Financial Page 9  planner, futures commission merchant, commodity pool operator, or commodity trading advisor, banking or thrift institution, accountant or accounting firm, lawyer or law firm, pension consultant, real estate broker or dealer or sponsor of syndicator of limited partnerships. Investment Advisor Representatives (IARs) for Kennon Financial are also licensed and registered as insurance agents to sell life, accident and other lines of insurance for various insurance companies. Therefore, they will be able to purchase insurance products for any client in need of such services and will receive separate, yet typical compensation in the form of commissions for the purchase of insurance products. This creates a conflict of interest because of the receipt of additional compensation by Kennon Financial or its IARs. Clients are not obligated to use Kennon Financial or its IARs for insurance products services. However, in such instances, there is no advisory fee associated with these insurance products, and clients will be made aware of all commissions associated with the products prior to the transactions. Kennon Financial does not recommend or select other investment advisers for clients. Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Kennon Financial is registered with the SEC and maintains a Code of Ethics pursuant to SEC rule 204A-1. Kennon Financial has adopted a Code of Ethics that sets forth the basic policies of ethical conduct for all managers, officers, and employees of the adviser. In addition, the Code of Ethics governs personal trading by each employee of Kennon Financial deemed to be an Access Person and is intended to ensure that securities transactions effected by Access Persons of Kennon Financial are conducted in a manner that avoids any conflict of interest between such persons and clients of the adviser or its affiliates. Kennon Financial collects and maintains records of securities holdings and securities transactions effected by Access Persons. These records are reviewed to identify and resolve conflicts of interest. Kennon Financial will provide a copy of the Code of Ethics to any client or prospective client upon request. Kennon Financial and/or its investment advisory representatives may from time to time purchase or sell products that they may recommend to clients. Kennon Financial and/or its investment advisory representatives have a fiduciary duty to put the interests of their clients ahead of their own. Kennon Financial requires that its investment advisory representatives follow its basic policies and ethical standards as set forth in its Code of Ethics. Investment Advisor Representatives of Kennon Financial may trade for their own accounts securities that are being traded for client accounts at or about the same time. To mitigate the conflict of interest in such circumstances, Kennon Financial’s policy is to require the trading of all relevant client account prior to the trading of their own accounts. The Chief Compliance Officer’s examines personal trading activities of Kennon Financial’s personnel to verify compliance with this policy. Kennon Financial Page 10  Item 12 Brokerage Practices If requested by the client, Kennon Financial may suggest brokers or dealers to be used based on execution and custodial services offered, cost, quality of service and industry reputation. Kennon Financial will consider factors such as commission price, speed and quality of execution, client management tools, and convenience of access for both the Advisor and client in making its suggestion. Kennon Financial intends to recommend that our clients use Charles Schwab & Co., Inc., a registered broker-dealer, member SIPC, as the qualified custodian for advisory accounts. The custodian and brokers we use Kennon Financial does not maintain custody of your assets, although we are deemed to have custody of your assets if you give us authority to withdraw assets from your account (see Item 15 – Custody, below). Your assets must be maintained in an account at a “qualified custodian,” generally a broker-dealer or bank. We recommend that our clients use Charles Schwab & Co., Inc. (“Schwab”), a registered broker-dealer, member SIPC, as the qualified custodian. We are independently owned and operated and are not affiliated with Schwab. Schwab will hold your assets in a brokerage account and buy and sell securities when we instruct them to. While we recommend that you use Schwab as custodian/broker, you will decide whether to do so and will open your account with Schwab by entering into an account agreement directly with them. We do not open the account for you, although we may assist you in doing so. Not all advisors require their clients to use a particular broker-dealer or other custodian selected by the advisor. Even though your account is maintained at Schwab, we can still use other brokers to execute trades for your account as described below (see “Your brokerage and custody costs”). How we select brokers/custodians We seek to recommend a custodian/broker that will hold your assets and execute transactions on terms that are overall most advantageous when compared with other available providers and their services. We consider a wide range of factors, including: • Combination of transaction execution services and asset custody services (generally without a separate fee for custody) • Capability to execute, clear, and settle trades (buy and sell securities for your account) • Capability to facilitate transfers and payments to and from accounts (wire transfers, check requests, bill payment, etc.) • Breadth of available investment products (stocks, bonds, mutual funds, exchange- traded funds (ETFs), etc.) • Availability of investment research and tools that assist us in making investment decisions • Quality of services • Competitiveness of the price of those services (commission rates, margin interest rates, other fees, etc.) and willingness to negotiate the prices • Reputation, financial strength, security and stability • Prior service to us and our clients • Availability of other products and services that benefit us, as discussed below (see “Products and services available to us from Schwab”) Kennon Financial Page 11  Your brokerage and custody costs For our clients’ accounts that Schwab 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. Certain trades (for example, many mutual funds, ETFs, and online stock and options trades) may not incur Schwab commissions or transaction fees. Schwab is also compensated by earning interest on the uninvested cash in your account in Schwab’s Cash Features Program. For some accounts, Schwab may charge you a percentage of the dollar amount of assets in the account in lieu of commissions. In addition to commissions and 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. We have determined that having Schwab execute most trades is consistent with our duty to seek “best execution” of your trades. Best execution means the most favorable terms for a transaction based on all relevant factors, including those listed above (see “How we select brokers/custodians”). Products and services available to us from Schwab Schwab Advisor Services™ is Schwab’s business serving independent investment advisory firms like us. They provide our clients and us with access to their institutional brokerage services (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. Following is a more detailed description of Schwab’s support services: 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 may use this research to service all or a 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) Kennon Financial Page 12  • facilitate trade execution and allocate aggregated trade orders for multiple client accounts facilitate payment of our fees from our clients’ accounts • 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: • Educational conferences and events • Consulting on technology, compliance, legal, and business needs • Publications and conferences on practice management and business succession • Access to employee benefits providers, human capital consultants, and insurance providers • Marketing consulting and support 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. We don’t have to pay for Schwab’s services. These services are not contingent upon us committing any specific amount of business to Schwab in trading commissions or assets in custody. This creates an incentive to recommend that you maintain your account with Schwab, based on our interest in receiving Schwab’s services that benefit our business and Schwab’s payment for services for which we would otherwise have to pay 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. Our selection is primarily supported by the scope, quality, and price of Schwab’s services (see “How we select brokers/custodians”) and not Schwab’s services that benefit only us. For any such products and services Kennon Financial receives from Schwab or other custodians, it will follow procedures which ensure compliance with Section 28(e) of the Securities Exchange Act of 1934 or applicable state securities rules. Kennon Financial does not receive client referrals from any broker-dealer or third party as a result of the firm selecting or recommending that broker-dealer to clients. Kennon Financial recommends that all clients use a particular broker-dealer for execution and/or custodial services. The broker-dealer is recommended based on criteria such as, but not limited to, reasonableness of commissions charged to the client, tools and services made available to the client and the Advisor, and convenience of access to the account trading and reporting. The client Kennon Financial Page 13  will provide authority to Kennon Financial to direct all transactions through that broker-dealer in the investment advisory agreement. As an investment advisory firm, Kennon Financial has a fiduciary duty to seek best execution for client transactions. While best execution is difficult to define and challenging to measure, there is some consensus that it does not solely mean the achievement of the best price on a given transaction. Rather, it appears to be a collective consideration of factors concerning the trade in question. Such factors include the security being traded, the price of the trade, the speed of the execution, apparent conditions in the market, and the specific needs of the client. Kennon Financial’s primary objectives when placing orders for the purchase and sale of securities for client accounts is to obtain the most favorable net results taking into account such factors as 1) price, 2) size of order, 3) difficulty of execution, 4) confidentiality and 5) skill required of the broker. Kennon Financial may not necessarily pay the lowest commission or commission equivalent as specific transactions may involve specialized services on the part of the broker. Kennon Financial does not permit clients to direct brokerage. Kennon Financial combines orders into block trades when more than one account is participating in the trade. This blocking or bunching technique must be equitable and potentially advantageous for each such account (e.g. for the purposes of reducing brokerage commissions or obtaining a more favorable execution price). Block trading is performed when it is consistent with the duty to seek best execution and is consistent with the terms of Kennon Financial’s investment advisory agreements. Equity trades are blocked based upon fairness to client, both in the participation of their account, and in the allocation of orders for the accounts of more than one client. Allocations of all orders are performed in a timely and efficient manner. All managed accounts participating in a block execution receive the same execution price (average share price) for the securities purchased or sold in a trading day. Any portion of an order that remains unfilled at the end of a given day will be rewritten on the following day as a new order with a new daily average price to be determined at the end of the following day. Due to the low liquidity of certain securities, broker availability may be limited. Open orders are worked until they are completely filled, which may span the course of several days. If an order is filled in its entirety, securities purchased in the aggregated transaction will be allocated among the accounts participating in the trade in accordance with the allocation statement. If an order is partially filled, the securities will be allocated pro rata based on the allocation statement. Kennon Financial may allocate trades in a different manner than indicated on the allocation statement (non-pro rata) only if all managed accounts receive fair and equitable treatment. Item 13 Review of Accounts Investment advisory client accounts are monitored on a quarterly basis, or when conditions would warrant a review based on market conditions, changes in client circumstances. Triggering factors may include Kennon Financial becoming aware of a change in client’s investment objective, a change in market conditions, change of employment, or a change in recommended asset allocation weightings in the account that exceed a predefined guideline. Client accounts are reviewed by David R. Kennon, CEO. The nature of the review is to determine if the client account is still in line with the client’s stated objectives. Kennon Financial Page 14  The client is encouraged to notify the Advisor and Investment Advisor Representative if changes occur in his/her personal financial situation that might materially affect his/her investment plan. The client will receive written statements no less than quarterly from the custodian. In addition, the client will receive other supporting reports from ETFs, asset managers, trust companies or other custodians, insurance companies, broker-dealers and others who are involved with client accounts. Kennon Financial does not deliver separate client reports. Item 14 Client Referrals and Other Compensation Kennon Financial is not compensated by anyone for providing investment advice or other advisory services except as previously disclosed in this Brochure. Kennon Financial does not directly or indirectly compensate any person who is not a supervised person for client referrals. Item 15 Custody Kennon Financial does not have custody of client funds or securities, except for the withdrawal of advisory fees directly from client accounts (please see Item 5 which describes the safeguards around direct fee deduction). However, as noted in Item 13 above, clients will receive statements not less than quarterly from the qualified custodian, and we encourage you to review those statements carefully. Any discrepancies should be immediately brought to the firm’s attention. Item 16 Investment Discretion Kennon Financial generally has discretion over the selection and amount of securities to be bought or sold in client accounts, and the broker-dealer to be used to effect the transactions without obtaining prior consent or approval from the client for each transaction. However, these purchases or sales are subject to specified investment objectives, guidelines, or limitations previously set forth by the client and agreed to by Kennon Financial. Discretionary authority will only be provided upon full disclosure to the client. The granting of such authority will be evidenced by the client’s execution of an Investment Advisory Agreement containing all applicable limitations to such authority. All discretionary trades made by Kennon Financial will be in accordance with each client’s investment objectives and goals. Item 17 Voting Client Securities Kennon Financial will not vote, nor advise clients how to vote, proxies for securities held in client accounts. The client clearly keeps the authority and responsibility for the voting of these proxies. Also, Kennon Financial cannot give any advice or take any action with respect to the voting of these proxies. The client and Kennon Financial agree to this by contract. Clients will receive proxy solicitations from their custodian and/or transfer agent. Kennon Financial Page 15  Item 18 Financial Information Kennon Financial does not require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance. Kennon Financial has never been subject to a bankruptcy petition. Kennon Financial Page 16