Mudrick Distressed

Opportunity Fund Offshore, Ltd.

Fund Investment Objectives

Mudrick Capital aims to achieve equity-like returns with credit-like risk and volatility in an uncorrelated fashion by constructing a diversified portfolio of long and short investments in distressed leveraged loans, distressed bonds, post-bankruptcy securities and other event driven special situations. Mudrick Capital seeks to use the potential or actual balance sheet restructuring process as a catalyst to capture the spread between trading values and inherent values. The long focus is to purchase the distressed credit of cash flow positive businesses at low multiples of EBITDA that Mudrick Capital believes are trading at significant discounts to their inherent values while the short focus is to hedge longs, hedge market and macro risks and profit from overvalued securities. The strategy focuses primarily in the US and looks across the entire capital structure. The majority of distressed-focused capital resides at large blue chip managers resulting in over-diversified portfolios that focus on larger "on-the-run" names with significant market beta. Mudrick Capital is taking advantage of many Wall Street proprietary trading desks shutting down by focusing on inefficiencies currently occurring in middle market companies too small for larger managers to devote significant resources.