Shaw & Baugh, Inc., predecessor to Baugh & Associates, LLC, was founded in 1976. Baugh & Associates, LLC (“Baugh & Associates” or “the firm”) was formed in 2004. Larry J. Baugh, President and Derek H. Baugh, Vice President are the principal owners of Baugh & Associates. Baugh & Associates, LLC is strictly a fee-only financial planning and investment management firm. The firm does not receive commissions for purchasing or selling annuities, stocks, bonds, mutual funds, limited partnerships, or other commissioned products. No commissions or finder’s fees are accepted in any form by the firm. Baugh & Associates, LLC does not act as a custodian of client assets. The client always maintains asset control. Baugh & Associates, LLC places trades for clients under a limited power of attorney through the brokerage firm being used as custodian. An evaluation of each client's initial situation is articulated to the client. Periodic reviews are also communicated to provide reminders of the specific courses of action that need to be taken. More frequent reviews occur but are not necessarily communicated to the client unless immediate changes are recommended. The initial meeting, which may be by telephone, is free of charge and is considered an exploratory interview to determine the extent to which financial planning and investment management may be beneficial to the client. Other professionals (e.g., lawyers, accountants, insurance agents, etc.) are engaged directly by the client on an as-needed basis. Conflicts of interest will be disclosed to the client in the unlikely event they should occur. Baugh & Associates, LLC manages investment advisory accounts and furnishes financial and investment advice through consultations. Baugh & Associates, LLC also furnishes advice to clients on matters not involving securities, such as financial planning, taxation issues, mortgage refinancing, estate planning, and financial and tax planning advice concerning the management of closely held businesses. Baugh & Associates provides advisory services, giving continuous advice based on the client’s individual needs. Advice is provided through consultation with the client and may include determination of financial objectives, identification of financial problems, cash flow management, tax planning, investment management, retirement planning, education funding, estate planning, and insurance review. Other professionals (e.g., lawyers, accountants, insurance agents, etc.) are engaged directly by the client on an as-needed basis. Through personal discussions with each client, the firm will develop a portfolio based on the client’s goals, objectives, risk tolerance, and time horizon. The firm will then manage the portfolio according to the criteria established. Most clients choose to have Baugh & Associates, LLC manages their assets in order to obtain ongoing in- depth advice and life planning. All aspects of the client’s financial affairs are reviewed, including those of their children, if applicable. Realistic and measurable goals are set, and objectives to reach those goals are defined. As goals and objectives change over time, suggestions are made and implemented on an ongoing basis. The annual Investment Advisory Agreement fee is based on a percentage of the assets we have under management for the client. There

is no minimum annual fee. Current client relationships may exist where the fees are higher or lower than the fee schedule. Assets are invested primarily in stocks (common and preferred), corporate bonds, which are purchased or sold through a brokerage account. The brokerage firm charges a transaction fee for all trades. Baugh & Associates, LLC does not receive any compensation, in any form, from the brokerage companies. On occasion, investments may also include warrants, certificates of deposit (“CD”), municipal securities, U.S. government securities, options contracts, exchange-traded funds (“ETF”) or notes (“ETN”), closed- end mutual funds and no-load open-end mutual funds. Fund companies charge each fund shareholder an investment management fee that is disclosed in the fund prospectus. Initial public offerings (IPOs) are occasionally available for Baugh & Associates, LLC’s clients, generally in the form of preferred stocks or corporate debt. Each client has the ability to impose reasonable restrictions on the management of his/her account, including the designation of particular securities or types of securities that should not be purchased for the account or that should be sold if held in the account. If a client’s instructions are unreasonable or an Investment Advisor Representative believes that the instructions are inappropriate for the client, Baugh & Associates will notify the client and arrange a discussion about why we think the instructions are inappropriate for the client. A client will not be able to provide instructions that prohibit or restrict the Portfolio Manager of an open-end or closed-end mutual fund or ETF with respect to the purchase or sale of specific securities or types of securities within the fund. Baugh & Associates also furnishes advice to clients on matters not involving securities management, such as taxation issues, mortgage refinancing, estate planning, and financial and tax planning advice concerning the management of closely held businesses. ERISA and Individual Retirement Accounts Disclosure 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 and/or the Internal Revenue 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 interests 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. As of March 11, 2024, Baugh & Associates held $250,547,073 in assets under management on a discretionary basis; and $850 in assets under management on a non-discretionary basis.