Tall Pines Capital, LLC (“Tall Pines” and/or “the firm”) is an Illinois limited liability company. The firm is
owned by Christopher Plahm. Tall Pines offers investment advisory to its clients.
A. Services
Tall Pines solely offers the following type of advisory service:
Separately Managed Account Product
The firm offers and manages a micro-capitalization product (“Tall Pines Micro Cap SMA”).
The Tall Pines Micro Cap SMA follows a fundamental long biased trading strategy
focused on providing long-term capital growth by investing primarily in the equity
securities of U.S. and Canadian-based companies with market capitalizations ranging
from $10 million to $1 billion (as valued at cost / initial purchase) either directly or through
warrants with respect to such securities.
The portfolio manager seeks to invest in:
●small, high-growth companies with little or no institutional ownership, and limited
trading liquidity
●companies with high-quality management teams whose interests are aligned with
company growth and stock price appreciation
●companies with a market-leading position with potential for growth
●a concentrated portfolio consisting of 5 to 15 positions
Fees and Compensation
The maximum annual management fee charged for this service will not exceed 2.50% per
annum. To the extent agreed-to by a client and Tall Pines (and with the exception of retirement
accounts or accounts otherwise subject to ERISA), Tall Pines will charge a performance fee
based on an initial investment high water mark. When a performance fee is to be charged, the fee
schedule will typically be structured in one of the following two ways: (i) a 1% per annum
management fee plus a 20% performance fee, or (ii) a 0% management fee plus a 25%
performance fee. Fees to be assessed will be outlined in the advisory agreement to be signed by
the Client. Annualized management fees are billed on a pro-rata basis quarterly in advance
based on the value of the account(s) on the last day of the previous quarter. Performance fees
are assessed annually in arrears based on a client’s initial investment as the high water mark.
Fees are negotiable and will be deducted from client account(s). Adjustments will be made for
deposits and withdrawals of $100,000 and greater during the quarter. In rare cases, our firm will
agree to directly invoice. As part of this process, Clients understand the following:
a) The client’s independent custodian sends statements at least quarterly showing the
market values for each security included in the Assets and all account disbursements,
including the amount of the advisory fees paid to our firm;
b) Clients will provide authorization permitting our firm to be directly paid by these terms.
Our firm will send an invoice directly to the custodian; and
c) If our firm sends a copy of our invoice to the client, a legend urging the comparison of
information provided in our statement with those from the qualified custodian will be
included.
The estimated trading cost component for a minimum account size of $100,000 is $200 to $600
per year.
These fees include charges for all transaction costs such as commissions on purchase and sales
of stocks, bonds, exchange-traded funds and options, trade-away fees on bonds and mutual fund
transactions fees. Except as otherwise provided below, client will incur no charges other than the
firm’s fee pursuant to the above fee schedule in connection with the maintenance of and activity
in client’s account. The wrap fee does not include internal expenses and fees of fund products
themselves. To the extent that securities transactions are executed away from Schwab, then
Schwab will typically directly charge the client commission mark-up and mark-downs that the
client will pay in addition to the wrap fee.
Our recommended custodian, Charles Schwab & Co., Inc. (“Schwab”), does not charge
transaction fees for U.S. listed equities and exchange traded funds. Since we pay the transaction
fees charged by the custodian to clients participating in our wrap fee program, this presents a
conflict of interest because we are incentivized to recommend these equities and exchange
traded funds over other types of securities in order to reduce our costs.
The client authorizes the qualified custodian to automatically deduct the fee and all other charges
payable hereunder from the assets in the account when due with such payments to be reflected
on the next account statement sent to the client. If insufficient cash is available to pay such fees,
securities in an amount equal to the balance of unpaid fees will be liquidated to pay for the unpaid
balance. Tall Pines may modify the fee at any time upon 30 days’ written notice to the client. In
the event the client has an ERISA-governed plan, fee modifications must be approved in writing
by the client.
A client investment advisory agreement may be canceled at any time by the client, or by Tall
Pines with 30 days’ prior written notice to the client. Upon termination, any unearned, prepaid
fees will be promptly refunded. The client has the right to terminate an agreement without penalty
within five business days after entering into the agreement.
B. Disclosure of Cost Difference if Services Purchased Separately
Depending on a number of factors, such as the number, size and nature of the securities
transactions in an advisory account, the overall fees and charges borne by the client over time
could
be more or less than what these fees and charges would be if the same services were
provided on a separate basis. Bundled fees generally provide an economic incentive for the
advisory firm to select investments and strategies that minimize trading costs. Frequent trading in
an account where transaction fees are included as part of the overall advisory fee to the client
drives trading costs higher and reduces the overall fee revenue to the advisor. As a result, higher
trading costs in a bundled fee account have a negative impact on the advisory firm’s profitability.
Accordingly, we have an incentive to limit our trading activities in wrap accounts.
C. Additional Client Fees and Terms of Payment
Tall Pines generally requires clients to authorize the direct debit of fees from their accounts.
Exceptions may be granted subject to the firm’s consent for clients to be billed directly for our
fees. For directly debited fees, the custodian’s periodic statements will show each fee deduction
from the account. Clients may withdraw this authorization for direct billing of these fees at any
time by notifying us or their custodian in writing.
Tall Pines will deduct its advisory fees directly from the client’s account provided that
●the client provides the qualified custodian written authorization;
●an invoice is sent in advance to the client;
●the invoice shows the amount of the fee, how it was calculated, and the value of the
assets on which the bill is based; and
●the qualified custodian sends the client a statement, at least quarterly, indicating all
amounts disbursed from the account.
The client is responsible for verifying the accuracy of the fee calculation, as the client’s custodian
will not verify the calculation.
Tall Pines generally requires fees to be prepaid on a quarterly basis. Tall Pines’ fees will either be
paid directly by the client or disbursed to Tall Pines by the qualified custodian of the client’s
investment accounts, subject to prior written consent of the client. The custodian will deliver
directly to the client an account statement, at least quarterly, showing all investment and
transaction activity for the period, including fee disbursements from the account.
All fees paid for investment advisory services are separate and distinct from the fees and
expenses charged by exchange-traded funds, mutual funds, separate account managers, private
placement, pooled investment vehicles, broker-dealers, and custodians retained by clients. Such
fees and expenses are described in each exchange-traded fund and mutual fund’s prospectus,
each separate account manager’s Form ADV and Brochure and Brochure Supplement or similar
disclosure statement, each private placement or pooled investment vehicle’s confidential offering
memorandum, and by any broker-dealer or custodian retained by the client. Clients are advised
to read these materials carefully before investing. If a mutual fund also imposes sales charges, a
client may pay an initial or deferred sales charge as further described in the mutual fund’s
prospectus. A client using Tall Pines may be precluded from using certain mutual funds or
separate account managers because they may not be offered by the client's custodian.
D. External Compensation for the Sale of Securities to Clients
The sole investment adviser representative of Tall Pines is a registered representative of APW
Capital, Inc., (“APW”), member FINRA/SIPC. As such, he is able to accept compensation for the
sale of securities or other investment products, including distribution or service (“trail”) fees.
Clients should be aware that the practice of accepting commissions for the sale of securities
presents a conflict of interest and gives the firm and/or our representative an incentive to
recommend investment products based on the compensation received. The firm generally
addresses commissionable sales conflicts that arise when explaining to clients these sales create
an incentive to recommend based on the compensation to be earned and/or when recommending
commissionable mutual funds, explaining that “no-load” funds are also available. Our firm does
not prohibit clients from purchasing recommended investment products through other unaffiliated
brokers or agents.
Tall Pines’ advisory professionals are compensated primarily through a salary and bonus
structure.
E. ERISA Accounts
When we provide investment advice to you regarding your retirement plan account or individual
retirement account, we are fiduciaries within the meaning of Title I of the Employee Retirement
Income Security Act (“ERISA”) and/or the Internal Revenue Code (the “Code”), as applicable,
which are laws governing retirement accounts. The way we make money creates some conflicts
with your interests, so we operate under a special rule that requires us to act in your best interest
and not put our interest ahead of yours. Under this special rule’s provisions, we must:
●Meet a professional standard of care when making investment recommendations (give
prudent advice);
●Never put our financial interests ahead of yours when making recommendations (give
loyal advice);
●Avoid misleading statements about conflicts of interest, fees, and investments;
●Follow policies and procedures designed to ensure that we give advice that is in your
best interest;
●Charge no more than is reasonable for our services; and
●Give you basic information about conflicts of interest.