A. We are a Delaware limited liability company that commenced operations as an investment adviser in July 2007 and are based in Mill Valley, California. Mr. Julian Allen (“Mr. Allen”) is our Founder, Managing Member and sole owner. We provide investment advisory services to pooled investment vehicles that are offered to investors on a confidential, private placement basis. Currently, we serve as the exclusive investment adviser to The Spitfire Fund L.P (the “Fund”), a private investment fund organized as a Delaware limited partnership. Spitfire Fund GP LLC, an affiliate of the Adviser, serves as the general partner (the “General Partner”) of the Fund.

B. We invest the Fund’s capital primarily in smaller capitalization publicly traded U.S. equities, but are authorized to enter into any type of investment transaction we deem appropriate for the Fund, pursuant to the terms of the Fund’s offering documents (the “Offering Documents”). C. We do not generally tailor our advisory services to the individual needs of investors in the Fund. However, we may enter into agreements with certain investors in the Fund that reduces their management and/or performance fee. D. We do not participate in any wrap fee programs. E. As of January 31, 2020, we had $55.2 million of regulatory assets under management. All assets are managed on a discretionary basis. please register to get more info

A. We charge each investor in the Fund a quarterly management fee equal to 0.375% of the balance in the investor’s capital account as of the first day of each calendar quarter. This equates to an annual management fee of 1.5%. The General Partner is allocated an annual performance fee (the "Special Allocation") equal to 20% of the annual net profits allocated to each investor in the Fund, including both realized and unrealized gains and losses, but only to the extent annual net profits exceed cumulative losses previously allocated to an investor for earlier periods that have not been recovered (the “High Water Mark"). The Special Allocation is made as of December 31 of each year and at any time there is a withdrawal by an investor in the Fund. Please see Item 6 for further discussion of performance fees.

Special Allocations will be made only by investors in the Fund who are "qualified clients" within the meaning of Rule 205-3 of the Investment Advisers Act of 1940, as amended (the "Advisers Act").

While the fees described above are our standard fees, we have full authority to modify the fees for certain investors in the Fund, including employees. Our employees do not currently pay fees on their investments in the Fund.

Investors should refer to the Offering Documents for a full description of our advisory fees.

B. We typically deduct management fees directly from the Fund in arrears on a quarterly basis at the end of each calendar quarter.

Special Allocations, if applicable, are automatically allocated from the capital account of each investor in the Fund to the General Partner’s capital account on December 31 of each year or at any time there is a withdrawal by an investor in the Fund.

C. In addition to management and performance fees, the Fund pays all brokerage commissions and other trading and transaction fees and costs. The Fund also incurs the cost of an annual audit, fund administration fees, legal fees incurred in connection with the organization and ongoing operations of the Fund, annual filing fees, and wire transfer and electronic fund fees. The Fund does not typically pay separate custodial fees. It obtains custodial, clearing and related services through what is known as a “prime brokerage” arrangement. Under this arrangement, a brokerage firm (the “Prime Broker”), among other things: (i) arranges for the receipt and delivery of securities bought, sold, borrowed and lent; (ii) makes and receives payments for securities purchased or sold; (iii) maintains custody of the Fund’s cash and securities; (iv) tenders securities in connection with tender offers, exchange offers, mergers or other corporate reorganizations; and (v) provides detailed portfolio and accounting reports. The Prime Broker allows us to use other broker-dealers to execute transactions. This permits us to seek valuable research and to compare execution quality and commission rates from other broker- dealers, while maintaining only one custodial relationship. By using a Prime Broker, the Fund avoids paying custodial fees that banks charge other institutional investors. The Prime Broker is compensated through trading commissions, interest on credit and debit balances, stock loan fees and ticket fees all of which are paid by the Fund.

Wells Fargo Securities, LLC currently serves as the Fund’s Prime Broker. Please refer to Item 12 for additional discussion of our brokerage arrangements. D. We do not charge fees in advance. E. Neither we nor any of our supervised persons accept compensation for the sale of securities or other investment products, including asset-based sales charges or service fees from the sale of mutual funds. please register to get more info

In addition to management fees, the General Partner receives a performance-based fee equal to a percentage of the net profit allocated to each investor in the Fund at the end of each calendar year and at any time there is a withdrawal by an investor in the Fund, subject to each investor’s High Water Mark. Performance-based fees may create an incentive for us to allocate investment opportunities to investors with higher performance-based fees over investors from whom we will receive a lower performance-based fee. To ensure fairness in the allocation of investment opportunities, it is our policy to never allocate trades based on an investor’s fee arrangement. We allocate all investment opportunities to all investors in the Fund on a pro-rata basis, subject only to restrictions on participating in new issues or special investments (as defined in the Offering Documents), regardless of differences, if any, in their respective fee arrangements. please register to get more info

We currently serve as the exclusive investment adviser to The Spitfire Fund L.P., a private investment fund organized as a Delaware limited partnership. Investors in the Fund may include high net worth individuals, trusts, estates, family offices, charitable organizations, pension funds, endowments, foundations, funds of funds, and other institutional investors. The Fund is a privately-offered investment fund that is not registered under the Investment Company Act of 1940, as amended, because of an exemption under Section 3(c)(1) of that Act.

Each investor in the Fund must qualify as (i) an “accredited investor,” as defined under the Securities Act of 1933, as amended, and (ii) a “qualified client” as defined in Rule 205-3 of the Advisers Act. All investors are required to make representations concerning their sophistication as investors and their ability to bear the risk of loss of their entire investment. There is a minimum investment of $1,000,000 for investors in the Fund although this minimum may be reduced at our discretion. please register to get more info

We are a long term value-oriented investor that focuses primarily on investing in the equity securities of smaller capitalization public U.S. companies based on a fundamental analysis of a company’s financial condition and its future prospects. In conducting our research and due diligence, we use company filings with the SEC, company press releases, analyst reports, company visits, meetings with company management, other primary due diligence, industry specific publications, general publications including newspapers, as well as financial publications and newsletters, among other information sources.

The investment strategy may utilize investment techniques including, but not limited to, buying on margin, short sales and options on securities which can, in certain circumstances, increase the adverse impact to which the Fund may be subject.

Investing in securities involves the risk of loss that investors in the Fund should be prepared to bear.

An investment in the Fund involves a high degree of risk and an investor should be aware that it may lose all or part of its investment. We believe that our investment strategy and research techniques moderate this risk through careful selection of securities, the holding of cash and the use of short positions and other financial instruments. HOWEVER, NO
GUARANTEE OR REPRESENTATION IS MADE THAT THE INVESTMENT
PROGRAM WILL BE SUCCESSFUL. The following list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Fund. Prospective investors should read the Offering Documents in their entirety and consult with their own professional advisers before deciding to invest in the Fund. Broad Discretion. Although we will generally follow investment guidelines, including position limits and liquidity and diversification requirements, there are no or few restrictions on how we may invest the Fund’s assets. Limited Liquidity. An investment in the Fund provides limited liquidity because Fund interests are not freely transferable and investors are subject to an initial lock-up and limited withdrawal rights thereafter. Limited Diversification. At any given time, it is possible that we may select investments that are concentrated in a particular market or industry, or in a limited number or type of securities. This limited diversification could expose investors to losses disproportionate to market movements in general if there are disproportionately greater adverse price movements in those investments. Illiquid Portfolio Securities. We may invest in securities of private companies and privately issued securities of public companies which we may not be able to readily dispose of and, in some cases, may be contractually prohibited from disposing of for a specified period of time. Disclosure of Positions. In an effort to protect the confidentiality of its positions, we do not intend to disclose the Fund’s positions to investors, although we may permit such disclosure on a selective basis to certain investors if we determine that there are sufficient confidentiality agreements and procedures in place. In certain situations, however, disclosure of the Fund’s positions, and changes in those positions, may be required under federal securities laws, including, for example, where we accumulate a significant position in a publicly-traded security, or where we exercise investment discretion over $100mm or more in Section 13(f) securities. Any such disclosure of the Fund’s positions could affect our ability to dispose of the positions or the prices at which the positions may be disposed.

Investing In Small- And Medium-Sized Companies. We typically invest in the securities of small and medium sized companies. Prices of small-capitalization and medium- capitalization securities tend to be more volatile than prices of large-capitalization securities. Such companies’ securities are more likely to trade at prices that reflect incomplete or inaccurate information. During some periods, securities of smaller companies have under-performed the securities of larger companies. Moreover, the risk of bankruptcy or insolvency of many small companies (with the attendant losses to investors) is often higher than for larger, “blue-chip” companies. In addition, due to thin trading in many small-capitalization securities, an investment in such securities may be illiquid and require more time to sell such securities.

Growth Stage Companies. We may invest in securities of companies that are in the growth stage of their operational history. While investments in growth stage companies can offer the opportunity for significant capital gains, such investments may involve a high degree of business and financial risk that could result in substantial losses. The stock market has, at different times, experienced significant volatility that has particularly affected the securities of different industries, such as technology. As a result, the Fund may experience substantial volatility if we invest in companies operating in a particularly volatile industry.

Investments in Undervalued Securities. The identification of investment opportunities in undervalued securities is a difficult task, and there is no assurance that we will be able to successfully recognize or acquire such securities. While investments in undervalued securities offer opportunities for above-average capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses. Returns generated from such investments may not adequately compensate for the business and financial risks assumed. When we make investments in securities that we believe to be undervalued, there are no assurances that the securities purchased will in fact be undervalued. In addition, we may be required to hold such securities for a substantial period of time before realizing their anticipated value. During this period, a portion of the Fund’s capital would be committed to the securities purchased, thus possibly preventing us from investing in other opportunities. In addition, we may finance such purchases with borrowed funds which will require the payment of interest on such borrowings during such holding periods. Event Driven Investing. Event driven investing requires us to make predictions about (i) the likelihood that an event will occur, and (ii) the impact such event will have on the value of a company’s securities. Losses may occur if the event fails to materialize or it does not have the predicted effect. For example, the adoption of new business strategies or completion of asset dispositions or debt reduction or restructuring programs by a company may not be valued as highly by the market as we had anticipated, resulting in losses. In liquidations and other forms of corporate reorganization, the risk exists that the reorganization either will be unsuccessful, will be delayed or will result in a distribution of cash or a new security, the value of which will be less than the purchase price of the security in respect of which such distribution was made. The consummation of mergers and tender and exchange offers can be prevented or delayed by a variety of factors. Because of the inherently speculative nature of event driven investing, results with respect to any such investments may be expected to fluctuate from period to period and will not necessarily be indicative of results that may be expected in future periods.

Risks of Owning Significant Positions. We may acquire positions exceeding 10% of the equity securities of a publicly traded company and may become a member of the board of directors of a company. In such an event, we will become subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”), and will be required to report all purchases and sales of such securities, and will be required to disgorge all profits realized by any sale or purchase within six months of another purchase or sale of such securities. To avoid the obligation to disgorge such profits, the Fund will be required to hold positions for longer than circumstances may warrant, with the result that we may be unable to dispose of a position at a propitious time. This inability to dispose of a position on a timely basis may reduce profits and/or result in losses.

Additionally, if we have a nominee serving on a company’s board of directors, we will likely have access to information about the company that is both material and non-public. Until that information is disclosed to the public or is no longer material, we will be unable to acquire additional securities of the company or dispose of any portion of the Fund’s position. This situation could make the position illiquid for an indefinite period of time and would likely impair our ability to otherwise invest the Fund’s capital or to meet a withdrawal request. Leverage and Financing Risk. We may utilize leverage in order to achieve a higher rate of return. Accordingly, we will pledge the Fund’s securities to the lender in order to borrow funds for investment purposes. We may also leverage investment returns with options, commodity futures contracts, short sales, swaps, forwards and other derivative instruments. The amount of borrowings which the Fund may have outstanding at any time may be substantial in relation to its capital. While leverage presents opportunities for increasing the Fund’s total return, it has the effect of potentially increasing losses as well. Accordingly, any event that adversely affects the value of an investment would be magnified to the extent the account is leveraged. The cumulative effect of the use of leverage in a market that moves adversely to investments could result in substantial loss, which would be greater than if the account was not leveraged. In addition, in the event of a sudden drop in the value of the Fund’s securities, we might not be able to liquidate securities quickly enough to satisfy margin requirements.

The financing used to leverage portfolios will be extended by broker dealers. While we will attempt to negotiate fair terms of these financing arrangements, our ability to do so is limited.

Distressed Securities. We may invest in “below investment grade” securities and obligations of issuers in weak financial condition, experiencing poor operating results, having substantial capital needs or negative net worth, or facing special competitive or product obsolescence problems, including companies involved in bankruptcy or other reorganization and liquidation proceedings. These securities are likely to be particularly risky investments although they also may offer the potential for correspondingly high returns. There is no assurance that we will evaluate correctly the value of the assets or securities held by the Fund in any such companies or the prospects for a successful reorganization or similar action. The Fund may lose its entire investment in any reorganization or liquidation proceeding relating to any such company, or may be required to accept cash or securities with a value less than their original investment and/or may be required to accept payment over an extended period of time. Under such circumstances, the returns generated from such investments may not compensate the Fund adequately for the risks assumed.

Futures. We may trade in futures contracts and options on futures. Futures positions may be illiquid because certain commodity exchanges limit fluctuations in certain futures contract prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” Under such daily limits, during a single trading day, no trades may be executed at prices beyond the daily limits. Once the price of a contract for a particular future has increased or decreased by an amount equal to the daily limit, positions in the future contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. This could prevent us from promptly liquidating unfavorable positions and subject the Fund to substantial losses. In addition, we may not be able to execute futures contract trades at favorable prices if little trading in the contracts involved is taking place. It also is possible that an exchange or the Commodity Futures Trading Commission may suspend trading in a particular contract, order immediate liquidation and settlement of a particular contract, or order that trading in a particular contract be conducted for liquidation only. Options. We may buy or sell call options and put options, and when we sell options we may do so on a “covered” or an “uncovered” basis. Options transactions may be part of a hedging tactic (i.e. offsetting the risk involved in another securities position) or a form of leverage, in which the Fund has the right to benefit from price movements in a large number of securities with a small commitment of capital. These activities involve risks that can be substantial, depending on the circumstances. Short Selling. Short selling involves selling securities that are not owned and borrowing them for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. A short sale creates the risk of a theoretically unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost of buying those securities back to cover the short position. There can be no assurance that the Fund will be able to maintain the ability to borrow securities sold short and in such cases, the securities can be recalled by the lender and the Fund can be “bought in” (i.e., forced to repurchase securities in the open market to return to the lender). There also can be no assurance that the securities necessary to cover a short position will be available for purchase at or near prices quoted in the market. Purchasing securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss.

Loans of Portfolio Securities. We may choose to lend the Fund’s securities in an attempt to increase income through the receipt of interest on the loan. In the event of the bankruptcy of the other party to a securities loan, the Fund could experience delays in recovering the loaned securities. To the extent that the value of the securities lent has increased, the Fund could experience a loss if such securities are not recovered.

Cybersecurity Risks. The computer systems, networks and devices used by us and our service providers to carry out routine business operations employ a variety of protections designed to prevent damage or interruption from computer viruses, network failures, computer failures, infiltration by unauthorized persons and security breaches. Despite the various protections utilized, our systems, networks and devices potentially could be breached. Such breaches may cause disruptions and impact business operations, potentially resulting in: financial losses to the Fund; interference with the Adviser’s ability to calculate the value of an investment in the Fund; impediments to trading; the inability of the Adviser to transact business; violations of applicable privacy and other laws; and the inadvertent release of confidential information. please register to get more info

To the best of our knowledge, there are no legal or disciplinary events that are material to an investor’s or prospective investor’s evaluation of our advisory business or the integrity of our management. please register to get more info

Spitfire Fund GP LLC, an affiliate of the Adviser, serves as the General Partner of The Spitfire Fund L.P. Mr. Allen is the Managing Member and sole owner of the Adviser and the General Partner. We do not have any other financial industry affiliations. please register to get more info

Personal Trading
We have adopted a Code of Ethics (the “Code”) in compliance with Rule 204A-1 under the Advisers Act that establishes standards of conduct for our employees and officers (“Supervised Persons”). As a fundamental mandate, we demand the highest standards of fairness, ethical conduct and care from all of our employees and officers. Supervised Persons must not take inappropriate advantage of their position with the Adviser and are under a duty to exercise their authority and responsibility for the benefit of the Fund and our investors. The Code includes general requirements that Supervised Persons comply with their fiduciary obligations to investors and applicable securities laws, and specific requirements relating to, among other things, personal account trading, insider trading and conflicts of interest.

The Code generally prohibits Supervised Persons from purchasing or selling securities for their personal accounts, subject to certain exceptions including the purchase and sale of shares issued by open-ended mutual funds, money market funds and exchange-traded funds. In addition, if any Supervised Person has any direct or indirect beneficial ownership in any non-exempted security as of the date she or he became a Supervised Person, any sale of that security thereafter must be pre-cleared in writing by the CCO.

Supervised Persons are required to disclose their personal holdings and transactions on a periodic basis, as well as certify on a periodic basis as to the completeness of the reported holdings and transactions. The CCO monitors Supervised Persons’ personal holdings and transactions closely and on a regular basis.

The Code also covers the conduct of Outside Business Activities, Political Contributions and Gifts and Business Entertainment. All Supervised Persons are required to comply with, and on a periodic basis certify their compliance with, the Code.

We will provide a copy of the Code to any investor or prospective investor upon request. Please contact our CCO at (415) 878-1903 or [email protected].

In the process of selecting investments for the Fund, we, or our affiliates, may invest in, or already be invested in, the same securities. This may create a conflict of interest between us and the Fund. Our Code of Ethics and policies and procedures set forth therein have been designed to limit these conflicts of interest such that the interests of the Fund, and the investors in the Fund, always come before our own. please register to get more info

A. We have complete discretion over the selection of broker-dealers for securities transactions and the commission rates or other transaction-related fees to be paid. However, we also have a duty to obtain “best execution” of securities transactions executed for the Fund. The duty of best execution is not defined in the federal securities laws but is based largely on common law fiduciary duty principles, court decisions and SEC no-action letters. The SEC has stated that in deciding what constitutes best execution, the determinative factor is not the lowest possible commission cost, but whether the transaction represents the best qualitative execution.

In seeking best execution, we consider the full range and quality of the services and products provided by various broker-dealers, including factors such as the ability of the broker-dealer to execute transactions efficiently, their responsiveness to our instructions, their reliability and financial stability and the value of any research or other services or products they provide. We are not required to select the broker- dealer that charges the lowest commission rate, even if that broker-dealer can provide execution quality comparable to other broker-dealers.

Research and related products and services provided by broker-dealers in connection with the execution of trades are sometimes referred to as “soft dollars”. As long as the services or other products provided by a particular broker-dealer qualify as “brokerage and research services” within the meaning of Section 28(e) of the Securities Exchange Act (and relevant SEC interpretations of that section) and we determine in good faith that the amount of commission charged by such broker-dealer is reasonable in relation to the value of such “brokerage and research services”, we may utilize the services of that broker-dealer to execute transactions for the Fund even if the Fund would incur higher transaction costs that it would have incurred had another broker-dealer been used and even if the Fund does not ultimately benefit from the research services or products provided by that broker-dealer.

When we use the Fund’s commissions to obtain research or brokerage products and services from a broker-dealer, we receive a benefit because we do not have to pay for the research, products or services. In addition, we may have an incentive to select a broker-dealer based on our interest in receiving research or brokerage products and services rather than the Fund’s interest in receiving the most favorable execution. In addition, we may cause the Fund to pay commissions higher than those charged by other broker-dealers in return for soft dollar benefits and we may use soft dollar benefits to provide services to clients other than the Fund. Within the last fiscal year, we used client commissions to pay for the following products and services: research reports published by broker-dealers and other parties; systems that provide company financial data, industry data, economic data and market data; a trade execution system that allows for electronic execution of trades; and access to industry conferences and broker-dealer research analysts. The majority of transactions for the Fund in the last fiscal year were executed with Wells Fargo Securities, LLC who acts as the Prime Broker and primary custodian for the Fund and who provides us with various soft dollar benefits. We believe the Prime Broker provided a number of valuable research and brokerage products and services to the Fund and that the commissions paid were reasonable and competitive in light of the value of the products and services provided.

B. We generally aggregate orders for the purchase or sale of securities for our various clients. When orders are aggregated, we will allocate the transactions (and the related transaction costs) on an average price basis among clients. We believe that combining orders in this way will, over time, be advantageous to all clients. However, the average price could be less advantageous to a client than if the client had been the only account effecting the transaction or had completed its transaction before the other participants. There may be circumstances in which we conclude that a client’s transactions may not or should not, under certain laws, regulations and internal policies, be combined with those of other clients. This may cause that client to obtain less advantageous execution than other clients whose transactions are aggregated. please register to get more info

We perform regular reviews of the Fund’s portfolio. Particular attention is paid to the current share price, earnings, future prospects and industry outlook of the individual securities held by the Fund. Factors such as the percentage of assets invested in each security, industry concentration and the amount of cash held in the Fund are also considered. An unaffiliated, third party fund administrator (the “Fund Administrator”) independently values the Fund’s portfolio each month and calculates the fees charged to investors. The Fund is audited annually by an independent public accountant that is registered with, and subject to regular inspection by, the Public Company Accounting Oversight Board. Investors in the Fund receive (i) a monthly capital account statement from the Fund Administrator; (ii) a monthly written performance report from the Adviser; (iii) a quarterly investor letter written by the Adviser; (iv) an annual Schedule K-1 from the Fund Administrator showing the investor’s share of taxable income for the year; and (v) a copy of the Fund’s audited financial statements. please register to get more info

A. We do not receive any economic benefits, directly or indirectly from any third party, for providing investment advice to the Fund. B. Currently neither we nor our related persons, directly or indirectly, compensate any person for referrals of clients or investors in the Fund. If in the future we enter into such arrangements, this Brochure will be appropriately amended. please register to get more info

Because the General Partner of the Fund is an affiliate of the Adviser, the Adviser is deemed to have custody of the Fund’s assets within the meaning of the Advisers Act. Pursuant to Rule 206(4)-2, the Custody Rule, all of the Fund’s assets are held by qualified custodians and the Fund is audited annually by an independent public accountant that is registered with, and subject to regular inspection by, the Public Company Accounting Oversight Board. The audited financial statements are prepared in accordance with U.S. generally accepted accounting principles and distributed to each investor in the Fund within 120 days of the Fund’s fiscal year end. please register to get more info

We provide investment advisory services on a discretionary basis to the Fund. We exercise this investment discretion in a manner consistent with the stated investment objectives in the Offering Documents. We have the authority to determine, among other things: (i) the securities to be purchased and sold for the Fund; (ii) the amount of securities to be purchased or sold for the Fund; and (iii) the broker-dealers to be used for the purchase or sale of securities and the commission rates to be paid. please register to get more info

We have the authority to vote the Fund’s securities and have adopted written proxy voting policies and procedures in accordance with Rule 206(4)-6 of the Advisers Act. In voting proxies, we are guided by general fiduciary principles and seek to act in the best interest of the Fund, and accordingly, of investors in the Fund. When we vote proxies, we do so in a manner that we believe will be consistent with efforts to maximize the value of the Fund’s investments. We seek to consider all positive and negative consequences our vote could have on the value of the investment. At our discretion, we may choose not to vote on a particular proxy.

In voting proxies, we will seek to avoid material conflicts between our interests and the interests of the Fund. If we encounter an identifiable conflict of interest with respect to a particular proxy, we will determine how to vote the proxy consistent with the best interests of the Fund and in a manner not affected by the conflict of interest. Investors in the Fund may not direct how we vote on a particular solicitation. Investors in the Fund may obtain a copy of our proxy voting policies and procedures and information about how a particular proxy was voted by contacting the CCO at (415) 878- 1903 or [email protected]. please register to get more info

At this time, we do not have any financial conditions that are reasonably likely to impair our ability to meet contractual commitments to the Fund or investors in the Fund. please register to get more info