Mischler Sparrow Asset Management A Service Disabled Veterans Business Enterprise Introduction to Mischler Sparrow Asset Management

Mischler Sparrow Asset Management was formed as of October 15, 2006 as a Joint Venture Agreement. The Agreement is between the Mischler Financial Group a Service Disabled Veteran Business Enterprise and Sparrow Capital Management a Veteran Owned Business. The Agreement brings professional expertise with small business service.

Mischler Financial Group was founded in 1994 as a Service Disabled Veteran Business Enterprise DVBE by Walter M. Mischler a West Point Graduate and Disabled American Veteran. The firm is an NASD/SEC registered Broker Dealer specializing in conservative investments for Institutional Fixed Income and Equity investments for Institutional Fixed Income and Equity Asset Managers worldwide.

Sparrow Capital Management Inc. was founded in 1988 a Veteran Owned business by Gerald R. Sparrow a Veteran of the United State Marine Corps. The firm is a registered investment advisor for Individuals, employee benefit programs, professional organizations, and trusts. Walter Mischler

Walter M. Mischler graduated from the Military Academy, West Point, N.Y. class of ‘69 with a B.S. in Engineering. He served on active duty from 1969 thru 1974 receiving honorable discharge with permanent classification as a service-connected disabled veteran. Gerald Sparrow

Gerald R. Sparrow a Veteran of the United States Marine Corps. He served on active duty from 1978 thru 1985 receiving honorable discharge.

Gerald graduated Summa Cum Laude from the University of Missouri and MBA from Washington University. Mischler Sparrow Profile

• Professional team with an average of 18 years of experience. • 13 Account Representatives • 2 Portfolio Managers • 4 Traders • 2 Equity Traders • 2 Research • 10 Administration • Office Sites in • Corona del Mar, California • , Illinois • St Louis, Missouri • Dallas, Texas • Detroit, Michigan Federal Legislation

● Service-Disabled Veteran-Owned Small Businesses (SDVOSB) – Congress has enacted two laws and the President has issued an Executive Order to assist small businesses owned and controlled by Service-Disabled Veteran-Owned Small Businesses (SDVOSB).

1) The Veterans Entrepreneurship and Small Business Development Act of 1999 (P.L. 106-50) set a 3 percent federal-wide procurement goal for contracts and subcontracts for SDVOSBs. 2) The Veterans Benefits Act of 2003 (P.L. 108-183) enables SDVOSBs to receive sole source and restricted competition contracts for goods and services used by the U.S. government. Executive Order 13360 (Service-Disabled Veterans Executive Order) will increase federal contracting and subcontracting opportunities for service-disabled veteran businesses.

Find U.S. Codes at http://www.law.cornell.edu/uscode/ California State Legislation

• January 1990 - CA passed first DVBE legislation goal 3% • Executive Order D-43-01 - June 2001 by the State of California, Whereas, the State of California established the Disabled Veteran Business Enterprise Program in 1989 (Public Contract Code 10115) to promote self-reliance for California disabled veterans by offering veterans the experience in business, while sharing their expertise with the citizens of California; and Whereas, existing law establishes the goal of awarding three percent of all state contracts to certified Disabled Veteran Business Enterprises; • Executive Order D-37-01 – May 2001 by the State of California 1. Increased small business participation in state contracting is a priority for my Administration; therefore, each Agency Secretary shall promote the use of small businesses in state contracting activities, review the small business participation levels within their agency and develop a plan for improvement within sixty days when participation levels are low. 2. All state agencies are required to pursue aggressively an annual 25 percent small business participation level in state contracting. Any state agency that does not achieve that level shall examine the reasons and submit to the Governor’s Office an explanation for why the level was not achieved. The explanation shall include a plan for improving contracting opportunities for small businesses. The Department of General Services shall provide resources to state agencies in developing a plan for and taking the necessary actions toward achieving the 25 percent participation level. Indiana State Legislation

• July 1, 2004 - IC 8-1-33 IN recognizes DVBE in state legislation.

• Chapter 33. Women and Minority Business Enterprises Sec. 1. (a) The general assembly finds and declares that the essence of the American economic system of private enterprise is free competition. Only through full and free competition can free markets, reasonable and just prices, free entry into business, and opportunities for the expression and growth of personal initiative and individual judgment be assured. The preservation and expansion of that competition is basic to the economic well- being of Indiana and that well-being cannot be realized unless the actual and potential capacity of women, minority, and disabled veteran business enterprises is encouraged and developed. Therefore, it is the declared policy of the state to aid the interests of women, minority, and disabled veteran business enterprises in order to preserve reasonable and just prices and a free competitive enterprise, to ensure that a fair proportion of the total purchases and contracts or subcontracts for commodities, supplies, technology, property, and services for regulated utilities are awarded to women, minority, and disabled veteran business enterprises, and to maintain and strengthen the overall economy of Indiana. • Sec. 1. (b) (2) The general assembly finds all of the following: Public agencies that have established short and long range women, minority, and disabled veteran business enterprise goals are awarding at least five percent (5%) of the agencies' contracts to these business enterprises. Why Mischler Sparrow

● Top-Rated Money Management Services – Focus upon growing our clients’ assets while minimizing risk. – Proven strategy with a history of strong results. – Highest Lipper Score for Tax Awareness * – Money Manager Review - Highly Ranked for Return vs. Risk * – Highest Lipper Score for Preservation of Capital *

● Powerful Research – Over 40 years of industry experience in research and portfolio management. – The great majority of research is conducted internally, with external support through a network of professional business and investment relationships.

● Core Growth Investment Philosophy – Growth stock portfolios diversified by market capitalization

● * The Lipper Leader system uses investor-centered criteria to determine a fund’s success in meeting goals including total return, consistent return, preservation of capital, tax efficiency and expense.

● * The Money Manager Review Performance Database ranks, compares and selects private money managers. Philosophy

Rising Momentum Spurs New Growth

At the heart of Sparrow's investment philosophy is the belief that growth creates more growth. Based on this fundamental principle, we believe that a portfolio composed of momentum growth stocks that are primarily large-cap and are fully diversified across all major economic sectors will provide investment returns that exceed market averages.

Sparrow invests exclusively in stocks that demonstrate high and sustainable growth momentum. Called a Core Momentum Growth Strategy, this investment approach first seeks stocks that have demonstrated superior long-term returns compared to general market indexes.

To identify potential opportunities, Sparrow searches both domestic and foreign markets along with multiple market sectors. Sparrow considers all market capitalizations with a bias toward large capitalizations. Our portfolios tend to resemble the capitalization mix found in general stock market indexes, such as the S&P 500, but Sparrow maintains the flexibility to invest in momentum opportunities at any capitalization size. Investment Process

• Generate Investment Ideas • Score Stocks • Conduct Fundamental Analysis • Sell Discipline: Generate Investment Ideas

Sparrow screens a database of approximately 200 different industries to find industries showing early signs of momentum. We then screen within those industries to find stocks that are showing momentum over multiple time frames (e.g. current quarter, current year, and next fiscal year). In particular, we are looking for both domestic and international stocks within industries with improving momentum that show the following characteristics:

• Positive earnings surprises • Positive earnings estimate revisions • Positive relative price strength Score Stocks

Stocks are then scored using a proprietary matrix of various fundamental, quantitative, and technical factors. Some of these factors include:

• Historical EPS growth rates • Balance sheet strength • Projected EPS growth rates • Free cash flow • Number of analysis who have boosted or lowered estimates • Shareholder friendly management • Likelihood of future earnings surprises • Short Interest • Return on equity • Relative strength trends Conduct Fundamental Analysis

Of the remaining stocks that have passed our tests from Steps 1 and 2, we launch a more in-depth review of the company and its future prospects. This includes:

• A review of the company’s original source materials such as annual reports, 10K’s, 10Q’s, and other public documents. • A review of independent reports from various sources that we subscribe to including Multex, Value Line, Zach’s, investment newsletters, and internet sites. • Direct contact with corporate management and security analysts. • A review of the sustainability of the company’s competitive advantages and key issues that will influence the stock price. • Determination of intrinsic value. Sell Discipline:

We consider selling a stock when it meets one or more of the following criteria:

• The stock appears to be fully valued based upon our intrinsic valuation model. • There is a violation of our investment thesis. • We find better investment ideas. Investment Philosophy “Core Momentum Growth Strategy“

Overview

Traditional investment diversification, also commonly known as asset allocation, consists of proportioning stocks, bonds, and cash to manage volatility and enhance returns. Successful stock selection requires further diversification by style (growth and value) and market capitalization (large-cap, mid-cap, small-cap). Sparrow offers clients the option of growth stock portfolios diversified by market capitalization using our Core Momentum Growth investment philosophy (stocks that demonstrate high and sustainable growth momentum).

• Small Cap Growth Portfolio • Large Cap Growth Portfolio • Balanced Portfolio • World Total Return Portfolio • Tax Advantaged Rising Dividend Portfolio • Special Situations and Earnings Momentum Portfolio • International Total Return Funds

• Sparrow Growth Fund • Hedge Fund • American Freedom Money Market Fund Sparrow Growth Fund

• Investment Style: Core Growth *

• Limit investment risk by diversifying the Fund’s investments across a broad range of economic sectors.

• Multi-cap growth portfolio for investors who seek long-term capital appreciation.

* Sold by Prospectus Only Sparrow Fund, L.P.

• Investment in Sparrow Fund, L.P. is available only to investors who meet the requirements of being both a accredited investor as defined in Rule 501(a) under the Securities Act and a qualified client as defined in Rule 205-3(a)(i) under the Investment Advisors Act of 1940. Available only by confidential Private Placement Memorandum. American Freedom Fund

• Institutional Money Market Fund

• American Freedom US Government Money Market Fund designed to meet clients short term investment and float needs. The fund consists of high quality money market securities and offers daily liquidity. The fund has maintained a AAAm rating since inception, 1/28/97 from Standard & Poor’s.

• For current Freedom Fund rates: http://www.mischlerfinancial.com/services/domestic/aff.h tm Mischler Sparrow Financial Website

Web page: www.Mischlerfinancial.com

Web page: www.sparrowcapital.com Contact Information Mischler Sparrow Asset Management

Contact Information: Gerald Sparrow Steven Monji President Vice President [email protected] [email protected] 314-991-8716 800-820-0640 x245

Offices:

California Missouri Corporate Office 11330 Olive Blvd 1101 Bayside Drive Suite 230 Suite 201 St. Louis, MO 61414 Corona del Mar, California 92625 Illinois Michigan Three First National Plaza 719 Griswold Street, Suite 820 70 West Madison, Suite 1400 Detroit, MI 48226 Chicago, IL 60602 Texas Office 2911 Turtle Creek Blvd, Suite 3057 Dallas, TX 75219 Business Partners

• Mischler Financial Group conducts business with a array of asset managers as directed by Plan Sponsors in order to achieve diversity goals; appendix A.. • The firm currently conducts business with some of the largest Plan Sponsors including California Public Employees' Retirement System (CalPERS), California State Teachers' Retirement System (CalSTRS) and the Illinois State Teacher’s Retirement System (IllSTRS). Appendix A

International Execution / Clearing Representative Asset Managers Relationships International: Domestic: Bear Stearns International Portfolio Trading New York, NY Arrowstreet Capital Ariel Capital Management, LLC. Ballie Gifford & Co. Alliance Bernstein Investment Management Global Markets of Ireland Asset Management Batterymarch Financial Management New York, NY 10013 BlackRock Inc. Brown Capital Management Capital Guardian Trust Company Delaware Investment Advisors First Delaware Investment Advisors Denver Investment Advisors New York, NY Fidelity Investments First Quadrant Fiduciary/Franklin/Templeton Institutional Legg Mason Capital Management HSBC Securities Asset Management Mellon Capital Management Corp. New York, NY 10005 Nicholas-Applegate Capital Management State Street Global Advisors Nomura Asset Management The Boston Company Instinet Oechsle International Advisors UBS Global Asset Management New York, NY 10036 Schroder Investment Management Western Asset Management Co. State Street Global Advisors Lehman Brothers UBS Global Asset Management Jersey City, NJ 07302

Merrill Broadcort Capital New York, NY 10038

UBS Securities, LLC Stamford, CT 06901