Millrace

Fund, L.P.

Fund Investment Objectives

The objective of the Millrace Fund, LP is to achieve superior absolute returns through small-cap investing. The Fund will employ both long and short equity positions to optimize potential returns and to preserve capital in difficult markets. The Managers believe that greater inefficiencies exist in the small capitalization sector than in higher market capitalization sectors. The Managers' experience indicates that these inefficiencies can be exploited by applying a disciplined research process to identify companies that exhibit proprietary characteristics giving them a dominant position in their industries. Identifying these companies early in their life cycle and following them for long periods of time can lead to a leveraging of knowledge and the potential for a sustained compounding of returns.