HUBUS133 Alpha Group Capital Legislative and Regulatory Scrutiny of Appraisal Proceedings Given its dependence on litigation (whether resulting in favorable settlements or court determinations), the Strategy has attracted more regulatory scrutiny and/or adverse publicity than many other alternative investment strategies. There are typically material and ongoing litigation/adversary proceedings involved in Appraisal Proceedings, and a number of critics have argued that the Strategy is not consistent with the purpose of the laws relating to Appraisal Proceedings — i.e., prevention of the oppression of minority shareholders (not providing profits to speculators which invest in the Target solely with the objective of profiting from the Appraisal Proceeding). This scrutiny and adverse publicity could result in changes in law in a number of jurisdictions that could reduce or eliminate the profit potential of the Strategy. Certain jurisdictions may, for example, reduce the statutory interest rate accrued on Appraisal Proceeding awards, which would correspondingly reduce the Strategy's profit potential. Dyferent Legal Protections Although Hudson Bay Capital expects that the bulk of the Corporate Value Fund's Investments will be in Targets/Acquirors subject to Delaware Law, a number may not be. The laws in different jurisdictions (for example, other states or countries) may not only be difficult to interpret but also materially less favorable to Appraisal Proceedings than those of Delaware — each of which may unexpectedly result in material losses on a given Investment. Risks Related to Certain Instruments Traded and Investment Techniques Equity Securities The bulk of the securities acquired by the Corporate Value Fund will be common stock, and the Corporate Value Fund's equity exposure will be substantial. Numerous inter- related and difficult-to-quantify economic factors, as well as market sentiment, subjective and extraneous factors, influence the