Michael P. Murphy

form the core portfolio, and to supplement those investments through short-term, opportunistic trades. Detailed, bottom-up, fundamental analysis is used to assess risk, gauge sentiment and identify securities with the most attractive risk/reward characteristics. The Fund allocates capital according to overall market direction and risk as well as the availability of specific opportunities that meet its investment criteria. The Fund's investment strategy is based upon a rigorous evaluation methodology that seeks to isolate the most compelling investment opportunities. We primarily utilize fundamental analysis with regard to equity investments in companies of varying market capitalizations to isolate those which we believe have the greatest potential for capital appreciation. We pride ourselves in our ability to obtain a thorough understanding of the business of the company, profit drivers, margin opportunities, pricing trends, market share, competitors and the overall financial health of the company. Further, we study where consensus estimates are and compare those estimates to the Fund's internally derived expectations. Moreover, we study the industry the company is in, and gain insight into leading indicators, end markets, and important macro economic data points. We further seek to diversify our portfolio in a risk adjusted manner by owning companies expected to exceed consensus expectations and selling or shorting companies that the Fund believes fall short. At Rosecliff, we also endeavor to be proactive and take advantage of temporary market inefficiencies in order to boost the overall performance of the Fund. In addition to investing in common equities, the Fund's investment strategy can include short selling, options, preferred stocks, commodity and financial futures contracts, fixed income securities, special situations and risk arbitrage. In summary, the Fund seeks to provide its investors with superior and sustainable returns combined with effective risk management. Although the asset allocation utilized by the Fund is primarily centered on publicly traded equities, we attempt to take advantage of opportunities in other asset classes if they meet our standards of investment merit.