7/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 1/70N21d122862dn2.htmFORMN2TableofContentsAsfiledwiththeSecuritiesandExchangeCommissiononJuly17,20151940ActFileNo.81123076UnitedStatesSecuritiesandExchangeCommissionWashington,D.C.20549FORMN2RegistrationStatementundertheInvestmentCompanyActof1940AmendmentNo.AabacoHoldings,Inc.(ExactNameofRegistrantasSpecifiedinCharter)701FirstAvenueSunnyvale,California94089(AddressofPrincipalExecutiveOffices)RegistrantsTelephoneNumber,IncludingAreaCode:(408)3493300RonaldS.Bell701FirstAvenueSunnyvale,California94089(NameandAddressofAgentforService)Copiesto:MichaelK.Hoffman,Esq.MarcR.Packer,Esq.Skadden,Arps,Slate,Meagher&FlomLLP7/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 2/70FourTimesSquareNewYork,NewYork100367/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 3/70TableofContentsExplanatoryNote:PortionsofthisRegistrationStatementandtheinformationstatementcontainedhereinarenotcomplete.TheRegistrantintendstofileoneormoreamendmentstothisRegistrationStatementpriortothespinoffdescribedherein.TheinformationstatementcontainedinthisRegistrationStatementwillnotbeusedinconnectionwithsuchspinoffuntilthestaffoftheSecuritiesandExchangeCommissionhascompleteditsreviewoftheinformationcontainedherein.7/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 4/70TableofContentsThe information in this information statement is not complete and may be changed. We will not use this information statementin connection with the SpinOff or otherwise until the staff of the Securities and Exchange Commission has completed itsreview of the information statement.SubjecttoCompletionPreliminaryInformationStatementdatedJuly17,2015INFORMATIONSTATEMENTCommonStockThisinformationstatementisbeingprovidedinconnectionwiththedistributiontoholdersofcommonstockofYahoo!Inc.(Yahoo),asadividend,ofallofthesharesofcommonstock,parvalue$0.00001pershare(theCommonStock),ofAabacoHoldings,Inc.(theFundorwe),aDelawarecorporationandcurrentlyawhollyownedsubsidiaryofYahoo.WerefertothistransactionastheSpinOff.IfallconditionstotheSpinOffaresatisfiedorwaivedbyYahooinitssolediscretion,at5:00p.m.,NewYorkCitytime,on[],2015(suchdateandtime,theDistributionDate),foreach[]wholeshare[s]ofYahooscommonstockheldbyyouasof5:00p.m.,NewYorkCitytime,on[],2015(suchdateandtime,theRecordDate),youwillreceiveoneshareoftheFundsCommonStock.CashwillbedistributedinlieuoffractionalsharesoftheFundsCommonStock.TheSpinOffisintendedtobetaxfreetoYahoostockholdersforUnitedStatesfederalincometaxpurposes,exceptforcashreceivedinlieuoffractionalshares.NovoteofYahoosstockholdersisrequiredorbeingsoughttoauthorizeoreffectuatetheSpinOff.Youdonotneedtopayanyconsideration,exchangeorsurrenderyourexistingsharesofYahooscommonstock,ortakeanyotheractiontoreceivesharesoftheFundsCommonStockintheSpinOff.FollowingtheSpinOff,theFundwillbeanindependent,publiclytraded,nondiversified,closedendmanagementinvestmentcompanyregisteredundertheInvestmentCompanyActof1940(the1940Act).ImmediatelyaftertheSpinOff,theFundsinvestmentassetswillconsistof383,565,416ordinaryshares,parvalueUS$0.000025pershare(theOrdinaryShares),ofAlibabaGroupHoldingLimited(Alibaba),representingasofthedateofthisinformationstatementanapproximate15percentownershipinterestinAlibaba,anda100percentownershipinterestinAabacoSmallBusiness,LLC.WesometimesrefertoAlibabasOrdinarySharesandAlibabasAmericanDepositaryShares(theAlibabaADS)collectivelyastheAlibabaShares.TheFundsinvestmentobjectiveistoseekreturnsforitsstockholdersprimarilythroughowningtheAlibabaShares.BasedontheclosingmarketpriceofAlibabaADSontheNewYorkStockExchangeon[],2015,theFundanticipatesthatthevalueofitsAlibabaShareswillexceed95percentofthevalueofitstotalassetsimmediatelyaftertheSpinOffiscompleted.TheFundwillseektoachieveitsinvestmentobjectivebycontinuingtoinvestatleast80percentofitstotalassetsinAlibabaSharesundernormalmarketconditions.TheFundsinvestmentobjectiveandthisinvestmentpolicyarenotfundamentalandeithermaybechangedwithoutstockholderapproval,althoughtheFundwillprovidestockholderswithatleast60daysnoticebeforeimplementinganychangetoitsinvestmentobjectiveorthisinvestmentpolicy.TherecanbenoassurancethattheFundwillachieveitsinvestmentobjective.Unlikemostregisteredinvestmentcompanies,theFundisnoteligibletobetreatedasaregulatedinvestmentcompanyundertheInternalRevenueCodeof1986,asamended,asaresultoftheFundsconcentratedownershipofAlibabaShares.Instead,theFundistreatedasaregularcorporation,oraCcorporation,forU.S.federalincometaxpurposesand,asaresult,7/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 5/70unlikemostinvestmentcompanies,issubjecttocorporateincometaxtotheextenttheFundrecognizestaxableincome.Asaresult,theFundwilltakeintoaccountthetaxconsequencesofanychangetoitsinvestmentportfolio.(Continuedoninsidecoverpage)Thedateofthisinformationstatementis[],2015.7/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 6/70TableofContents(Continuedfromcoverpage)YahoocurrentlyownsalloftheFundsoutstandingCommonStock.Accordingly,thereisnocurrenttradingmarketfortheFundsCommonStock,althoughweexpectthatalimitedmarket,commonlyknownasawhenissuedtradingmarket,willdeveloponorshortlybeforetheRecordDate,andweexpectregularwaytradingoftheFundsCommonStocktobeginonthefirsttradingdayfollowingcompletionoftheSpinOff.SharesoftheFundsCommonStockareexpectedtobelistedon[]underthesymbol[],subjecttonoticeofissuance.BecausetheFundisnewlyorganized,ithasnooperatinghistoryanditsCommonStockhasnohistoryofpublictrading.Commonstockofclosedendinvestmentcompaniesfrequentlytradesatadiscountfromnetassetvalue.InvestingintheFundsCommonStockinvolvescertainrisks.BecausetheFundscurrentinvestmentpolicyistoinvestatleast80percentofitstotalassetsintheAlibabaShares,aninvestmentintheFundisparticularlysubjecttorisksrelatingtoAlibaba.SeeRiskFactorsbeginningonpage32ofthisinformationstatement.Youshouldcarefullyconsidertheseriskstogetherwithalloftheotherinformationcontainedinthisinformationstatement.NeithertheSecuritiesandExchangeCommissionnoranystatesecuritiescommissionhasapprovedordisapprovedofthesesecuritiesorhaspassedupontheadequacyoraccuracyofthisinformationstatementastruthfulorcomplete.Anyrepresentationtothecontraryisacriminaloffense.Youshouldreadthisinformationstatement,whichcontainsimportantinformationabouttheFundthatyoushouldknow,andretainitforfuturereference.YoumayrequestafreecopyofthisinformationstatementoranyotherinformationfiledwiththeU.S.SecuritiesandExchangeCommission(theSEC),whenavailable,andotherinformationabouttheFund,andmakestockholderinquiries,bycalling[]orbywritingto[],oryoumayobtainacopy(andotherinformationregardingtheFund)fromtheSECswebsite(www.sec.gov).FreecopiesoftheFundsreportswillalsobeavailablefromtheFundswebsiteat[].TheFundsCommonStockdoesnotrepresentadepositinorobligationof,andisnotguaranteedorendorsedby,anybankorotherinsureddepositoryinstitution,andisnotfederallyinsuredbytheFederalDepositInsuranceCorporation,theFederalReserveBoard,oranyothergovernmentagency.Thisinformationstatementcontainsorincorporatesbyreferenceforwardlookingstatements,withinthemeaningofthefederalsecuritieslaws,whichinvolverisksanduncertainties.ThesestatementsdescribetheproposedSpinOff,theFundsplans,strategies,andgoals,andtheFundsbeliefsandassumptionsconcerningfutureeconomicandotherconditionsandtheoutlookfortheFund,basedoncurrentlyavailableinformation.Inthisinformationstatement,wordssuchasanticipates,believes,expects,objectives,goals,future,intends,seeks,will,may,could,should,andsimilarexpressionsareusedinanefforttoidentifyforwardlookingstatements,althoughsomeforwardlookingstatementsmaybeexpresseddifferently.TheFundisnotentitledtothesafeharborforforwardlookingstatementspursuanttoSection27AoftheSecuritiesActof1933.Youshouldrelyonlyontheinformationcontainedorincorporatedbyreferenceinthisinformationstatement.TheFundhasnotauthorizedanyotherpersontoprovideyouwithdifferentinformation.Ifanyoneprovidesyouwithdifferentorinconsistentinformation,youshouldnotrelyonit.Youshouldnotassumethattheinformationinthisinformationstatementisaccurateasofanydateotherthanthedateofthisinformationstatement.TheFundsbusiness,financialcondition,andresultsofoperationsmayhavechangedsincethatdate.7/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 7/70TableofContentsTABLEOFCONTENTSSummary 1SummaryofFundExpenses 12ProFormaStatementofAssetsandLiabilities 13TheFund 15TheSpinOff 16InvestmentObjectiveandPolicies 26BorrowingsandPreferredStock 30RiskFactors 32ManagementoftheFund 45InvestmentAdvisoryServices 47DescriptionofCapitalStructure 47CertainProvisionsoftheFundsGoverningDocuments 48ClosedEndFundStructure 51RepurchaseoftheFundsCommonStock 51BrokerageTransactions 51U.S.FederalIncomeTaxConsiderations 52Custodian,TransferAgent,andAdministrator 55PrincipalStockholders 56IndependentRegisteredPublicAccountingFirm 57ProxyVotingPolicies 57CodeofEthics 57AdditionalInformation 58PrivacyPrinciplesoftheFund 58i7/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 8/70TableofContentsSUMMARYThisisonlyasummaryofinformationcontainedelsewhereinthisinformationstatement.Youshouldcarefullyreadthemoredetailedinformationcontainedinthisinformationstatement,especiallytheinformationundertheheadingsTheSpinOff,InvestmentObjectiveandPolicies,andRiskFactors.TheFund AabacoHoldings,Inc.(theFundorwe)isaDelawarecorporationandcurrentlyisawhollyownedsubsidiaryofYahoo!Inc.(Yahoo).YahoohasauthorizedaplantospinofftheFundbydistributingtotheholdersofYahooscommonstock,asadividend,alloftheFundsoutstandingsharesofcommonstock,parvalue$0.00001pershare(theCommonStock).WerefertothistransactionastheSpinOff.FollowingtheSpinOff,theFundwillbeanindependent,publiclytraded,nondiversified,closedendmanagementinvestmentcompanyregisteredundertheInvestmentCompanyActof1940(the1940Act).ImmediatelyaftertheSpinOff,theFundsinvestmentassetswillconsistof383,565,416ordinaryshares,parvalueUS$0.000025pershare(theOrdinaryShares),ofAlibabaGroupHoldingLimited(Alibaba),representingasofthedateofthisinformationstatementanapproximate15percentownershipinterestinAlibaba,anda100percentownershipinterestinAabacoSmallBusiness,LLC(ASB).TheFundwillhold290,938,700ofitsAlibabaSharesthroughAabacoHoldingsHongKongLimited(formerly,Yahoo!HongKongHoldingsLimited)(AabacoHongKong),aHongKongprivatecompanylimitedbysharesandawhollyownedsubsidiaryofYahoothatengagesinnootherbusinessoroperations,andownsnootherassets.WesometimesrefertoAlibabasOrdinarySharesandAlibabasAmericanDepositaryShares(theAlibabaADS)collectivelyastheAlibabaShares.FollowingtheSpinOff,YahoowillnotretainanyownershipinterestintheFund.However,directors,officers,andemployeesofYahoowhoownsharesofYahooscommonstockontherecorddatefortheSpinOffwillreceivesharesoftheFundsCommonStockinconnectionwiththeSpinOffinthesameratioasotherYahoostockholders.InvestmentObjectiveandPolicies TheFundsinvestmentobjectiveistoseekreturnsforitsstockholdersprimarilythroughowningtheAlibabaShares.BasedontheclosingmarketpriceoftheAlibabaADSontheNewYorkStockExchangeon[],2015,theFundanticipatesthatthevalueofitsAlibabaShareswillexceed95percentofthevalueofitstotalassetsimmediatelyaftertheSpinOffiscompleted.TheFundsinvestmentobjectiveisnotfundamentalandmaybechangedwithoutstockholderapproval,althoughtheFundwillprovidestockholderswithatleast60daysnoticebeforeimplementinganychangetoitsinvestmentobjective.TherecanbenoassurancethattheFundwillachieveitsinvestmentobjective.TheFundwillseektoachieveitsinvestmentobjectivebycontinuingtoinvestatleast80percentofitstotalassetsinAlibabaSharesunder17/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 9/70TableofContentsnormalmarketconditions.Thispolicyisnotfundamentalandmaybechangedwithoutstockholderapproval,althoughtheFundwillprovideitsstockholderswithatleast60daysnoticebeforeimplementinganychangetothisinvestmentpolicy.TheFundhasnocurrentintentionofinvestinglessthan80percentofitstotalassetsintheAlibabaShares.BecausetheFundsinvestmentpolicyistoinvestatleast80percentofitstotalassetsintheAlibabaShares,aninvestmentintheFundisparticularlysubjecttorisksrelatingtoAlibaba.SeeRiskFactors.TheFundsinvestmentintheAlibabaShareswillcauseittobeanondiversifiedinvestmentcompanyandtoconcentrateitsinvestmentsinsecuritiesissuedbycompaniesintheonlineservicesandecommerceindustry.Asaresult,the1940ActrequirestheFundtoobtainstockholderapprovaltoinvestlessthan25percentofitstotalassetsincompaniesintheonlineservicesandecommerceindustry.TheFundhasnocurrentintentionofinvestinglessthan25percentofitstotalassetsincompaniesintheonlineservicesandecommerceindustry.TheFundintendstoenterintoacreditfacility(theCreditFacility)pursuanttowhichtheFundmayborrowupto$[]million.TheFundanticipatesthatitwillinitiallyborrow$[]millionpursuanttotheCreditFacilityatoraboutthetimeofthecompletionoftheSpinOff.ThepurposeoftheinitialborrowingistoprovideworkingcapitalduringtheFundsfirstyearofoperations.TheFundcurrentlyintendstoborrowmoneyonlyforworkingcapitalandtorepurchaseitsCommonStockifandtotheextentauthorizedbyitsBoardofDirectorsfromtimetotime.TheFunddoesnotcurrentlyintendtousetheproceedsofanyborrowingtopurchaseadditionalinvestmentsecuritiesortopaydividendstostockholders,thoughitretainstherighttodoso.TheFundreservestherighttoborrowmoneytotheextentpermittedbythe1940Act.TheFundmaylenditsAlibabaSharestogenerateincome.SuchincomemaybeusedforworkingcapitalpurposesortorepurchasetheFundsCommonStockifandtotheextentauthorizedbyitsBoardofDirectorsfromtimetotime.TheFundhasnocurrentintentionoflendingitsAlibabaSharestogenerateincometobeusedtopurchaseadditionalinvestmentsecuritiesorpaydividendstostockholders,thoughitretainstherighttodoso. AlibabaGroupHoldingLimitedandAlibabaADSAlibabaisanonlineandmobilecommercecompanythatoperatesprimarilyinthePeoplesRepublicofChina(thePRC).AsofMay,2015,Alibabareportedthatitisthelargestonlineandmobilecommercecompanyintheworldintermsofgrossmerchandisevolume.Alibabaoperatesaplatformforthirdparties,anditdoesnotengageindirectsales,competewithmerchants,orholdinventory.27/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 10/70TableofContentsInSeptember2014,AlibabacompletedaninitialpublicofferingoftheAlibabaADS.AsapubliccompanyAlibabafilesreportswiththeU.S.SecuritiesandExchangeCommission(theSEC)containingfinancialandothermaterialinformationaboutitsbusinessandrisksrelatingtoitsbusiness.ThisinformationmaybeobtainedattheSECswebsiteatwww.sec.gov.YoushouldreviewinformationfiledbyAlibabawiththeSECbecausethevalueoftheFundsCommonStockwillbeheavilydependentuponandinfluencedbythevalueoftheAlibabaShares.TheAlibabaADSaretradedontheNewYorkStockExchangeunderthesymbolBABA.On[],2015,theclosingpriceoftheAlibabaADSontheNewYorkStockExchangewas$[]pershare.EachAlibabaADSrepresentsanownershipinterestinoneAlibabaOrdinaryShare. AabacoSmallBusinessASBwasformedinconnectionwiththeSpinOffandwillacquiretheassetsandassumetheliabilitiesrelatingtothebusinessthathashistoricallybeenoperatedbyYahoounderthenameYahooSmallBusiness.ASBoperatesacloudbasedservicesplatformthatenablessmallbusinessentrepreneurstostart,build,andgrowtheirbusinesses.ASBprovidesafullsetofendtoendservicesformerchantstogettheironlinebusinessesupandrunninginamatterofdays.ASBallowsitscustomerstochoosefromarangeofprepackagedoptionsforwebhosting,domainregistration,ecommercehostingservices(includingmerchantbillingandpaymentsolutions),andotherofferings.TheSpinOff YahoohasauthorizedaplantospinofftheFundbydistributingtotheholdersofYahooscommonstock,asadividend,alloftheFundsoutstandingCommonStock. RequirementsforYahooStockholderParticipationintheSpinOffHoldersofYahooscommonstockontheRecordDatearenotrequiredtomakeanyelection,payanycashordeliveranyotherconsideration,orgiveupanysharesofYahooscommonstock,toreceivetheFundsCommonStockdistributabletothemintheSpinOff. DistributiontoYahooStockholdersHoldersofYahooscommonstockwillreceiveadividendofoneshareoftheFundsCommonStockforeach[]wholeshare[s]ofYahooscommonstockheldbythemontheRecordDate.CashwillbedistributedinlieuoffractionalsharesoftheFundsCommonStock.37/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 11/70TableofContents SecuritiestobeDistributedBasedonthe[]sharesofYahooscommonstockoutstandingon[],2015,andthedistributionratioofoneshareoftheFundsCommonStockforeach[]wholeshare[s]ofYahooscommonstock,weexpectthatapproximately[]sharesoftheFundsCommonStockwillbedistributedintheSpinOff.ThesharesoftheFundsCommonStocktobedistributedbyYahoowillconstitutealltheissuedandoutstandingsharesoftheFundsCommonStockimmediatelyaftertheSpinOff.TheexactnumberofsharesoftheFundsCommonStocktobedistributedintheSpinOffwillnotbeknownuntiltheRecordDate. TheRecordDate TheRecordDateis5:00p.m.,NewYorkCitytime,on[],2015. TheDistributionDateandEffectiveTimeoftheSpinOffTheDistributionDateoftheSpinOffis5:00p.m.,NewYorkCitytime,on[],2015.YahoointendstoeffecttheSpinOffontheDistributionDate. DistributionAgent[],([])servesastheFundsdistributionagentfortheCommonStock.[]islocatedat[]. RelationshipBetweenYahooandtheFundFollowingtheSpinOffFollowingtheSpinOff,theFundandYahoowilloperateindependentlyofeachother,andneitherwillhaveanyownershipinterestintheotherasaresultoftheSpinOff.InconnectionwiththeSpinOff,however,theFundandYahoo(orcertainoftheirrespectivesubsidiaries)areenteringintoagreementsinordertogoverntherelationshipsbetweentheFundandYahooaftertheSpinOffandtoprovideforanorderlytransition.TheFundwillenterintoaseparationanddistributionagreement(theSeparationandDistributionAgreement)withYahoowhichwillsetforth,amongotherthings,theprincipalcorporatetransactionsrequiredtoeffecttheSpinOff,theconditionstotheSpinOff,andongoingobligationsoftheFundandYahoofollowingcompletionoftheSpinOff.TheFundwillalsoenterintoataxmattersagreement(theTaxMattersAgreement)withYahoothatwillgovernYahoosandtheFundsrespectiverights,responsibilities,andobligationswithrespecttotaxesandtaxbenefits,thefilingoftaxreturns,thecontrolofaudits,andothertaxmatters.47/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 12/70TableofContentsYahooandASBwillenterintoatransferagreement(theTransferAgreement)pursuanttowhichYahoowilltransfertoASBsubstantiallyalloftheassetsexclusivelyrelatingtothebusinesshistoricallyoperatedbyYahooasYahooSmallBusiness,subjecttocertainexcludedassetsidentifiedintheTransferAgreement,andASBwillassumealloftheliabilitiesrelatingtosuchassetsandbusiness.TheFund,YahooandcertainoftheirrespectivesubsidiarieswillenterintootheragreementsprimarilyintendedtofacilitatetheoperationsofASBfollowingtheSpinOff(theAncillaryAgreements).TheAncillaryAgreementswillprovidefor(1)theprovisionofcertaintechnologyrelatedservices,onatransitionalbasis(2)theprovisionofcertaingeneralandadministrativeservices,onatransitionalbasis(3)certainnonexclusivelicensesfortheuseofcertainintellectualpropertyand(4)ASBscontinuedprovisionofYahoosbusinessemailplatformtoASBscustomers.InadditiontotheseAncillaryAgreements,ASBwilllicensecertaincontenttoYahoo,andASBwillenterintoanadvertisingreselleragreementwithYahoo.TheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andtheAncillaryAgreementswillbeapprovedbytheBoardofDirectorsoftheFund(theBoardortheBoardofDirectors,andeachmemberoftheBoardaDirectorandtogethertheDirectors)inaccordancewithrequirementsofthe1940ActandcertainpronouncementsofthestaffoftheSECthereunder. ConditionsPrecedenttotheSpinOffTheSeparationandDistributionAgreementwillprovidethatthecompletionoftheSpinOffissubjecttothesatisfactionofthefollowingconditions,eachofwhichmaybewaived,inwholeorinpart(totheextentpermittedbyapplicablelaw),byYahooinitssoleandabsolutediscretion. TheboardofdirectorsofYahooshallhaveapprovedtheSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andanyAncillaryAgreement,includingthesettingoftheRecordDateandthedeclarationofthedividendoftheFundsCommonStock,whichapprovalmaybegivenorwithheldatitssoleandabsolutediscretion. TheBoardofDirectorsoftheFundshallhaveapprovedcompliancepoliciesandprocedures,andcausedtheFundtoenterintosuchagreementsandtakesuchotheractions,asreasonablynecessarytoensurethattheFundwillnotviolatetheUnitedStatesfederalsecuritieslaws. TheregistrationstatementundertheSecuritiesExchangeActof1934(the1934Act)relatingtotheFundsCommonStock57/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 13/70TableofContentsshallhavebecomeeffective,withnostoporderineffectwithrespectthereto,andwithnoproceedingsforsuchpurposependingorthreatenedbytheSEC,andthisInformationStatementshallhavebeenprovidedtoholdersofYahooscommonstockasoftheRecordDate. TheFundshallhaveregisteredasaninvestmentcompanyunderthe1940Act,suchregistrationshallnothavebeenwithdrawn,norevocationofregistrationshallhavebeenissued,andnoproceedingforsuchpurposeshallbependingorthreatenedbytheSEC. AllotheractionsandfilingsnecessaryorappropriateunderapplicablefederalorstatesecuritieslawsandstateblueskylawsinconnectionwiththeSpinOffshallhavebeentakenormade. YahooshallhavereceivedafavorableprivateletterrulingfromtheIRSregardingcertainU.S.federalincometaxaspectsoftheSpinOff(theIRSRuling),whichrulingshallremaininfullforceandeffect,andshallnothavebeenmodifiedoramendedinanyrespectadverselyaffectingtheU.S.federalincometaxtreatmentoftheSpinOff. YahooshallhavereceivedanopinionfromSkadden,Arps,Slate,Meagher&FlomLLP(SkaddenArps)(whichopinionmayrelyupontheeffectivenessandcontinuedvalidityoftheIRSRuling),informandsubstancereasonablyacceptabletoYahoo,substantiallytotheeffectthattheSpinOffwillqualifyasataxfreetransactiontoYahooanditsstockholdersunderSections355and368(a)(1)(D)oftheInternalRevenueCodeof1986,asamended(theCode),andthat,forU.S.federalincometaxpurposes,(1)nogainorlosswillberecognizedbyYahoouponthedistributionoftheFundsCommonStockintheSpinOff,and(2)nogainorlosswillberecognizedby,andnoamountwillbeincludedintheincomeof,holdersofYahooscommonstockuponthereceiptofsharesoftheFundsCommonStockintheSpinOff(exceptwithrespecttothereceiptofcashinlieuoffractionalsharesoftheFundsCommonStock). Yahooshallhavereceivedanopinionfromanationallyrecognizedvaluationfirm,informandsubstanceacceptabletoYahoo,substantiallytotheeffectthat,amongotherthings,(1)YahoohasadequatecapitalsurplusundertheDelawareGeneralCorporationLawtoeffecttheSpinOff,and(2)aftergivingeffecttotheSpinOff,Yahoowillbesolvent. TheFundsCommonStocktobedistributedpursuanttotheSpinOffandrelatedtransactionsshallhavebeenacceptedforlistingon[],subjecttoofficialnoticeofissuance. ThetransactionscontemplatedbytheTransferAgreementshallhavebeencompleted.67/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 14/70TableofContents TheTaxMattersAgreementandtheAncillaryAgreementsshallhavebeenexecutedanddeliveredbyeachofthepartiestheretoandnopartytotheTaxMattersAgreementoranyoftheAncillaryAgreementsshallbeinmaterialbreachofanysuchagreement. AllgovernmentalapprovalsandconsentsnecessarytoconsummatetheSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andanyAncillaryAgreementshallhavebeenobtainedandbeinfullforceandeffect. Nopreliminaryorpermanentinjunctionorotherorder,decree,orrulingissuedbyagovernmentalauthority,andnostatute(asinterpretedthroughordersorrulesofanygovernmentalauthoritydulyauthorizedtoeffectuatethestatute),rule,regulation,orexecutiveorderpromulgatedorenactedbyanygovernmentalauthorityshallbeineffectpreventingtheconsummationof,ormateriallylimitingthebenefitsof,theSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andanyAncillaryAgreement. Noothereventordevelopmentshallhaveoccurredorfailedtooccurthat,inthejudgmentoftheboardofdirectorsofYahooinitssolediscretion,preventstheconsummationoftheSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andanyAncillaryAgreementormakestheconsummationofsuchtransactionsinadvisable.Yahoohasreservedtheright,initssoleandabsolutediscretion,toabandonormodifythetermsoftheSpinOffatanytimepriortotheDistributionDate,eveniftheconditionstotheSpinOffhavebeensatisfied. U.S.FederalIncomeTaxConsequencesoftheSpinOffThecompletionoftheSpinOffisconditioneduponthereceiptbyYahoooftheIRSRuling,whichrulingshallremaininfullforceandeffect,andshallnothavebeenmodifiedoramendedinanyrespectadverselyaffectingtheU.S.federalincometaxtreatmentoftheSpinOff.Inaddition,theSpinOffisconditioneduponthereceiptbyYahooofanopinionofSkaddenArpstotheeffectthattheSpinOffwillqualifyasataxfreetransactionunderSections355and368(a)(1)(D)oftheCodeandthat,forU.S.federalincometaxpurposes,(1)nogainorlosswillberecognizedbyYahoouponthedistributionoftheFundsCommonStockintheSpinOff,and(2)nogainorlosswillberecognizedby,andnoamountwillbeincludedintheincomeof,holdersofYahooscommonstockuponthereceiptofsharesoftheFundsCommonStockintheSpinOff(exceptwith77/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 15/70TableofContentsrespecttothereceiptofcashinlieuoffractionalsharesoftheFundsCommonStock).Yahoohasreservedtherighttowaivetheseconditionsinitssoleandabsolutediscretion.FormoreinformationregardingtheopinionofSkaddenArpsandthepotentialtaxconsequencesoftheSpinOfftoyou,pleaseseeU.S.FederalIncomeTaxConsiderationsMaterialU.S.FederalIncomeTaxConsequencesoftheSpinOff,RiskFactorsRisksRelatedtotheSpinOffTheSpinOffcouldresultinsignificanttaxliabilities,andRiskFactorsRisksRelatedtotheSpinOffTheFundmayhaveasignificantindemnityobligationtoYahoo,whichisnotlimitedinamountorsubjecttoanycap,iftheSpinOffistreatedasataxabletransaction.HoldersofYahooscommonstockareurgedtoconsulttheirtaxadvisorsastothespecifictaxconsequencesoftheSpinOfftotheminlightoftheirparticularcircumstances.ManagementoftheFund TheFundisinternallymanagedbyitsofficersandemployeesunderthesupervisionofitsBoardofDirectors.SeeManagementoftheFund.Distributions Unlikemostregisteredinvestmentcompanies,theFunddoesnotanticipatemakingregulardistributionstoitsstockholders.TheFundmay,however,makedistributionsfromtimetotimeinthesolediscretionofitsBoardofDirectors.TaxationoftheFund Unlikemostregisteredinvestmentcompanies,theFundisnoteligibletobetreatedasaregulatedinvestmentcompanyundertheCodeasaresultoftheFundsconcentratedownershipofAlibabaShares.Instead,theFundistreatedasaregularcorporation,oraCcorporation,forU.S.federalincometaxpurposesand,asaresult,unlikemostinvestmentcompanies,issubjecttocorporateincometaxtotheextenttheFundrecognizestaxableincome.FormoreinformationregardingtheU.S.federalincometaxtreatmentoftheFund,pleaseseeU.S.FederalIncomeTaxConsiderationsU.S.FederalIncomeTaxationoftheFund.ListingandSymbol TheFundsCommonStockisexpectedtobelistedon[]underthesymbol[],subjecttonoticeofissuance.Onthedateofthisinformationstatement,theFundisawhollyownedsubsidiaryofYahoo.Accordingly,thereisnopublicmarketfortheFundsCommonStock.Weanticipatethat,beginningonorshortlybeforetheRecordDate,tradingintheFundsCommonStockwillbeginonawhenissuedbasisandwillcontinueuptoandincludingthroughtheDistributionDate.BeginningonorshortlybeforetheRecordDateandcontinuinguptoandincludingthroughtheDistributionDate,YahooexpectsthattherewillbetwomarketsinYahooscommonstock:aregularwaymarketandanexdistributionmarket. SharesofYahooscommonstockthattradeontheregularwaymarketwilltradewithanentitlementtotheFundsCommonStockdistributedpursuanttotheSpinOff.Therefore,ifyousell87/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 16/70TableofContentsYahooscommonstockintheregularwaymarketuptoandincludingthroughtheDistributionDate,youwillbesellingyourrighttoreceivetheFundsCommonStockintheSpinOff. SharesofYahooscommonstockthattradeontheexdistributionmarketwilltradewithoutanentitlementtotheFundsCommonStockdistributedpursuanttotheSpinOff.IfyouownYahooscommonstockontheRecordDateandsellthosesharesontheexdistributionmarketuptoandincludingthroughtheDistributionDate,youwillreceivetheFundsCommonStockthatyouareentitledtoreceivepursuanttoyourownershipofYahooscommonstockasoftheRecordDate.SeeTheSpinOffTradinginYahoosCommonStockBetweentheRecordDateandDistributionDate.SpecialRiskConsiderations AninvestmentintheFundissubjecttoinvestmentrisk,includingthepossiblelossoftheentireprincipalamountinvested.InvestmentintheFundinvolvesspecialriskconsiderations,whicharesummarizedbelow: RisksRelatedtoAlibabaAlibabaisanonlineandmobilecommercecompanythatoperatesprimarilyinthePRC.ImmediatelyaftertheSpinOff,AlibabaSharesareexpectedtorepresentmorethan95percentofthevalueoftheFundstotalassets.TheFundcurrentlyintendstocontinuetoinvestatleast80percentofitstotalassetsintheAlibabaShares.Asaresult,themarketpriceandnetassetvalueoftheFundsCommonStockwillbemateriallyimpactedbythemarketpriceofAlibabaShares,whichinturnwillbeaffectedbyAlibabasbusiness,management,resultsofoperations,andfinancialcondition.AlibabafileswiththeSECreportscontainingfinancialandothermaterialinformationaboutitsbusinessandrisksrelatingtoitsbusiness.YouareencouragedtoreviewtheinformationsetforthinAlibabasregistrationstatementonFormF1(andtheprospectusthatisapartofthatregistrationstatement)andinitsannualreportsfiledonForm20FforadditionalinformationaboutAlibabasbusiness,management,resultsofoperations,financialcondition,andrisks.YoushouldalsoreviewAlibabaspressreleasesandreportsfiledwiththeSEConForm6K.ThisinformationmaybeobtainedattheSECswebsiteatwww.sec.gov.YoushouldreviewinformationfiledbyAlibabawiththeSECbecausethevalueoftheFundsCommonStockwillbeheavilydependentuponandinfluencedbythevalueoftheAlibabaShares. RisksRelatedtotheSpinOff TheFundissubjecttothefollowingriskfactorsrelatingtotheSpinOff: TheSpinOffcouldresultinsignificanttaxliabilities.97/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 17/70TableofContents YahooandtheFundfaceuncertaintieswithrespecttoPRCtaxationofindirecttransfersofChinesetaxablepropertyinconnectionwiththeSpinOff. TheFundmayhaveasignificantindemnityobligationtoYahoo,whichisnotlimitedinamountorsubjecttoanycap,iftheSpinOffistreatedasataxabletransaction. TheFundmaydecidenottoengageincertaintransactionsinordertoavoidtheriskofincurringsignificanttaxrelatedliabilities. AchangeincontroloftheFundmightbediscouraged,delayed,orpreventedbecauseoftheFundsindemnityobligationundertheTaxMattersAgreement. TheconditionstotheSpinOffmaynotbesatisfiedorwaivedandtheSpinOffmaynotoccur. ASBhasneveroperatedasanindependentcompanyanditsbusinessmaybeunsuccessful. FollowingtheSpinOff,theFundwillbesubjecttoincreasedcosts. ThefinancialinformationprovidedinthisinformationstatementmaynotberepresentativeoftheFundsactualfuturefinancialposition. RisksRelatedtotheFundsOperationsasanInvestmentCompanyTheFundissubjecttothefollowingriskfactorsrelatingtoitsoperationsasaninvestmentcompany: InvestmentsintheFundmayperformpoorlyandcouldresultinyourentireinvestmentbeinglost. AninvestmentintheFundsCommonStockshouldnotbeconsideredacompleteinvestmentprogram. TheFundsinvestmentsinequitysecuritiesarevolatile. TheFundsrevenuesourcesmaybelimitedfollowingtheSpinOff. TheFundsuseofborrowedmoneyforworkingcapitalortorepurchasesharesofitsCommonStockcouldresultingreatervolatilityandlosses. TheFundsinvestmentperformancemaybemateriallyandadverselyaffectedbyeconomicconditionsinthePRCaswellasglobally. IfthePRCgovernmentdeemsthatthecontractualarrangementsinrelationtoAlibabasvariableinterestentitiesdonotcomplywithPRCgovernmentrestrictionsonforeigninvestment,oriftheseregulationsortheinterpretationofexistingregulationschangeinthefuture,Alibabasbusinessandresultsofoperations107/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 18/70TableofContentsmaybeimpacted,whichinturnmayadverselyaffecttheFundsinvestmentperformance. ThereareuncertaintiesregardingtheinterpretationandenforcementofPRClaws,rulesandregulations. LendingtheFundssecuritiestothirdpartiesmaycauselosses. TheFundsuseofserviceprovidersmeansthattheFundisreliantonthirdpartiestoperformtheirobligations. TheFundreliesonthecompetenceandcontinuedserviceofitsownofficersandDirectorstomanagetheFund. Asanondiversifiedinvestmentcompany,theFundsinvestmentperformanceisatriskfromfluctuationsinAlibabasperformance. TheFundsinvestmentsareconcentratedintheonlineservicesandecommerceindustry,andrisksassociatedwiththisindustrymayadverselyaffecttheFundsinvestments. Limitationsimposedbythe1940ActmayadverselyaffecttheFundsoperations. TheFundwillfaceadditionalregulatoryrequirementsandincreasedexpensesifitbecomessubjecttoregulationasacommoditypooloperator.RisksRelatedtotheFundsCommonStockandtheSecuritiesMarketFollowingtheSpinOffTheFundissubjecttothefollowingriskfactorsrelatingtoitsCommonStockandthesecuritiesmarkets: AnactivetradingmarketfortheFundsCommonStockmightnotdevelop. SharesoftheFundsCommonStockmaytradeatadiscountfromnetassetvalue. AntitakeoverprovisionsintheFundsgoverningdocumentswillmakeitmoredifficultforathirdpartytoacquiretheFund.ForamorecompletediscussionofthespecialriskconsiderationsassociatedwithaninvestmentintheFund,pleaseseeRiskFactors.Custodian []servesasthecustodianoftheFundsassetspursuanttoacustodyagreement.Underthecustodyagreement,thecustodianholdstheFundsassetsincompliancewiththe1940Act.TransferAgent []servesastheFundstransferagentandregistrarwithrespecttotheFundsCommonStock.Administrator PursuanttoanadministrationagreementwiththeFund,[]providescertainadministrativeandbookkeepingservicestotheFund.117/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 19/70TableofContentsSUMMARYOFFUNDEXPENSESThepurposeofthetableandtheexamplebelowistohelpyouunderstandthefeesandexpensesthatyou,asaholderoftheFundsCommonStock,wouldbeardirectlyorindirectly.TheexpensesshowninthetablearebasedonestimatedamountsfortheFundsfirstyearofoperationsandassumethattheFundhasanapproximateaverageaggregatedailynetassetvalueof$[]duringitsfirstfullyearofoperations.TheFundsactualexpensesmayvaryfromtheestimatedexpensesshowninthetable.CommonStockholderTransactionExpenses Salesload(asapercentageofofferingprice) N/ADividendreinvestmentandcashpurchaseplanfees(1) None PercentageofNetAssetsAttributabletoCommonStock AnnualExpenses(asapercentageofnetassetsattributabletotheFundsCommonStock)(2)Interestpaymentsonborrowedfunds(3) []%Otherexpenses(4) []% Totalannualexpenses []% (1) TheFundhasnotadoptedadividendreinvestmentorcashpurchaseplan.(2) NetassetsattributabletotheFundsCommonStockequalstotalassetslesstotalliabilitiesasof[],2015.(3) Assumesacostofborrowedfundsof[]percent.Thisrateisanestimateandmaydifferbasedonvaryingmarketconditionsanddependingonthetypeofborrowingused.IftheFundborrowsinanamountgreaterthan$[](orapproximately[]percentofitstotalassetsimmediatelyaftertheSpinOff)thisamountcouldincrease.(4) TheOtherexpensespercentageisbasedonanestimateofannualexpensesrepresentingalloftheFundsoperatingexpenses(exceptfeesandexpensesreportedinotheritemsofthistable)thatwillbedeductedfromtheFundsoperatingincomeandreflectedasoperatingexpensesintheFundsstatementofoperations,netofinterestexpense,fortheFundsfirstfullyearofoperations,dividedbynetassetsattributabletotheFundsCommonStockasof[],2015.AsrequiredbyrelevantSECregulations,thefollowingexampleillustratestheexpensesthatyouwouldpayona$1,000investmentintheFundsCommonStock,assuming(1)TotalAnnualExpensesof[]percentofnetassetsattributabletotheFundsCommonStockand(2)afivepercentannualreturn:*1Year 3Years 5Years 10Years$[] $[] $[] $[]* Theexampleshouldnotbeconsideredarepresentationoffutureexpensesorreturns.TheexampleassumesthattheamountestimatedaboveforTotalAnnualExpensesisaccurate.Actualexpensesmaybehigherorlowerthanthoseassumed.Moreover,theFundsactualrateofreturnmaybehigherorlowerthanthehypotheticalfivepercentreturnshownintheexample.127/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 20/70TableofContentsPROFORMASTATEMENTOFASSETSANDLIABILITIESThefollowingunauditedproformastatementofassetsandliabilitiesoftheFundassumesthattheSpinOffoccurredasof[],2015,thatthedistributionratiowasequaltooneshareoftheFundsCommonStockforeach[]wholeshare[s]ofYahooscommonstock,resultingin[]sharesoftheFundsCommonStockoutstanding,thattheAlibabaSharescontributedtotheFundwerevaluedattheclosingpriceoftheAlibabaADSon[],2015,andthatotherassetscontributedtotheFundwerevaluedatfairvalue.Asof[],2015 Fund(asof[],2015) ProFormaFund Assets: Investmentinnoncontrolledaffiliate(1) $ 0 $ []Investmentincontrolledaffiliate(1) 0 []Cash [10] []TotalAssets $ [10] $ []Liabilities:Deferredtaxespayableonunrealizedappreciation(2)$ 0 $ []CreditFacility(3) 0 []TotalLiabilities $ 0 $ []NetAssetsAttributabletoCommonStockholders $ [10] $ []NetAssetsAttributabletoCommonStockholdersConsistof:Paidincapital,at$0.00001parvaluepershare $ [10] $ []Netunrealizedappreciationoninvestments [] []TotalNetAssets $ [10] $ []NetAssetValuePerCommonShare $ [] $ [](1) InvestmentsincompaniesfivepercentormoreofwhoseoutstandingvotingsecuritiesareheldbytheFundareaffiliatesoftheFundasdefinedinSection2(a)(3)ofthe1940Act.(2) Basedonthe$[]closingpriceofAlibabaADSon[],2015,theFundstaxbasisinitsAlibabaSharesandanassumedeffectivecombinedFederalandstatecorporatetaxrateoncapitalgainsofapproximately41percent.(3) TheFundintendstoenterintoacreditfacility(theCreditFacility)pursuanttowhichtheFundmayborrowupto$[]million.TheFundanticipatesthatitwillinitiallyborrow$[]millionpursuanttotheCreditFacilityatoraboutthetimeofthecompletionoftheSpinOff.SeeBorrowingsandPreferredStockbelow.YoucanfindinformationregardingAlibabasfinancialstatementsandbusinessinAlibabasperiodicreportsfiledwiththeSEC.137/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 21/70TableofContentsSetforthbelowisinformationwithrespecttoYahooscommonstockandtheFundsCommonStockfollowingtheSpinOff.ThefollowingtableassumesthatthenumberofsharesoftheFundsCommonStockdistributedasadividendinconnectionwiththeSpinOffwillbebasedonthe[]sharesofYahooscommonstockoutstandingasof[],2015andthedistributionratioofoneshareoftheFundsCommonStockforeach[]wholeshare[s]ofYahooscommonstock. AmountAuthorized AmountHeldbyIssuerorforitsAccount AmountOutstandingYahoocommonstock 5,000,000,000 [] []FundCommonStock(proforma) [] []147/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 22/70TableofContentsTHEFUNDAabacoHoldings,Inc.(theFundorwe)isaDelawarecorporationandcurrentlyisawhollyownedsubsidiaryofYahoo!Inc.(Yahoo).YahoohasauthorizedaplantospinofftheFundbydistributingtotheholdersofYahooscommonstock,asadividend,alloftheFundsoutstandingsharesofcommonstock,parvalue$0.00001pershare(theCommonStock).WerefertothistransactionastheSpinOff.FollowingtheSpinOff,theFundwillbeanindependent,publiclytraded,nondiversified,closedendmanagementinvestmentcompanyregisteredundertheInvestmentCompanyActof1940(the1940Act).ImmediatelyaftertheSpinOff,theFundsinvestmentassetswillconsistof383,565,416ordinaryshares,parvalueUS$0.000025pershare(theOrdinaryShares),ofAlibabaGroupHoldingLimited(Alibaba),representingasofthedateofthisinformationstatementanapproximate15percentownershipinterestinAlibaba,anda100percentownershipinterestinAabacoSmallBusiness,LLC(ASB).TheFundwillhold290,938,700ofitsAlibabaOrdinarySharesthroughAabacoHoldingsHongKongLimited(formerly,Yahoo!HongKongHoldingsLimited)(AabacoHongKong),aHongKongprivatecompanylimitedbysharesandawhollyownedsubsidiaryofYahoothatengagesinnootherbusinessoroperations,andownsnootherassets.WesometimesrefertoAlibabasOrdinarySharesandAlibabasAmericanDepositaryShares(theAlibabaADS)collectivelyastheAlibabaShares.FollowingtheSpinOff,YahoowillnotretainanyownershipinterestintheFund.However,directors,officers,andemployeesofYahoowhoownsharesofYahooscommonstockontherecorddatefortheSpinOffwillreceivesharesoftheFundsCommonStockinconnectionwiththeSpinOffinthesameratioasotherYahoostockholders.AlibabaGroupHoldingLimitedandAlibabaADSAlibabaisanonlineandmobilecommercecompanythatoperatesprimarilyinthePeoplesRepublicofChina(thePRC).AsofMay,2015,Alibabareportedthatitisthelargestonlineandmobilecommercecompanyintheworldintermsofgrossmerchandisevolume.Alibabaoperatesaplatformforthirdparties,anditdoesnotengageindirectsales,competewithmerchants,orholdinventory.InSeptember2014,AlibabacompletedaninitialpublicofferingoftheAlibabaADS.AsapubliccompanyAlibabafilesreportswiththeU.S.SecuritiesandExchangeCommission(theSEC)containingfinancialandothermaterialinformationaboutitsbusinessandrisksrelatingtoitsbusiness.ThisinformationmaybeobtainedattheSECswebsiteatwww.sec.gov.YoushouldreviewinformationfiledbyAlibabawiththeSECbecausethevalueoftheFundsCommonStockwillbeheavilydependentuponandinfluencedbythevalueofAlibabaADS.TheAlibabaADSaretradedontheNewYorkStockExchangeunderthesymbolBABA.On[],2015,theclosingpriceoftheAlibabaADSontheNewYorkStockExchangewas$[]pershare.EachAlibabaADSrepresentsoneAlibabaOrdinaryShare.TheAlibabaOrdinarySharesarenotlistedfortradingontheNewYorkStockExchangeoranyothernationalsecuritiesexchange.Accordingly,inordertosellAlibabaOrdinarySharesthroughtheNewYorkStockExchangeortolendthemtoinvestors,theFundmustfirstdepositthemwithCitibank,N.A.HongKongbranch,ascustodianforCitibank,N.A.(theDepositary)inexchangeforAlibabaADSandthensellorlendtheAlibabaADS.AabacoSmallBusinessASBwasformedinconnectionwiththeSpinOffandwillacquiretheassetsandassumetheliabilitiesrelatingtothebusinessthathashistoricallybeenoperatedbyYahoounderthenameYahooSmallBusiness.ASBoperatesacloudbasedservicesplatformthatenablessmallbusinessentrepreneurstostart,build,andgrowtheirbusinesses.ASBprovidesafullsetofendtoendservicesformerchantstogettheironlinebusinesses157/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 23/70TableofContentsupandrunninginamatterofdays.ASBallowsitscustomerstochoosefromarangeofprepackagedoptionsforwebhosting,domainregistration,ecommercehostingservices(includingmerchantbillingandpaymentsolutions),andotherofferings.Itsofferings,whicharegenerallytailoredtotheonlineneedsofsmallandmediumsizebusinesses(SMBs),comprisefourmaingroupsofproducts:WebHosting,ECommerce,Localworks,andSmallBusinessAdvisor.ASBgeneratesrevenueprincipallyfromuserfeespaidbySMBsforitscoreWebHostingandECommerceofferings.ItiscurrentlyanticipatedthatASBwillhaveapproximately140150fulltimeemployeesatthetimeoftheSpinOff.THESPINOFFYahoohasauthorizedaplantospinofftheFundbydistributingtotheholdersofitscommonstock,asadividend,alloftheFundsoutstandingCommonStock.DistributiontoYahooStockholdersHoldersofYahooscommonstockwillreceiveadividendofoneshareoftheFundsCommonStockforeach[]wholeshare[s]ofYahooscommonstockheldbythemontheRecordDate.HoldersofYahooscommonstockwillnotreceiveanyfractionalsharesoftheFundsCommonStock.Instead,thedistributionagentwillaggregatefractionalsharesintowholeshares,sellthewholesharesintheopenmarketatprevailingmarketprices,anddistributetheaggregatecashproceeds(netofdiscountsandcommissions)ofthesalesproratatoregisteredholdersofYahooscommonstockwhoheldsuchsharesontheRecordDate(basedonthefractionalshareeachsuchholderwouldotherwisehavebeenentitledtoreceiveinthedistribution).Thedistributionagent,initssolediscretion,withoutanyinfluencebytheFundorYahoo,willdeterminewhen,how,andthroughwhichbrokerdealertosellthewholeshares.AnybrokerdealerusedbythedistributionagentwillnotbeanaffiliateofeithertheFundorYahoo.NeithertheFundnorYahoowillbeabletoguaranteeanyminimumsalepriceinconnectionwiththesaleoftheseshares.Recipientsofcashinlieuoffractionalshareswillnotbeentitledtoanyinterestonamountspaidinlieuoffractionalshares.TheaggregatenetcashproceedsofthesesaleswillbetaxableforU.S.federalincometaxpurposes.SeethesectionentitledU.S.FederalIncomeTaxConsiderationsMaterialU.S.FederalIncomeTaxConsequencesoftheSpinOff.IfyouarearegisteredholderofYahooscommonstockandareentitledtoreceiveapaymentinlieuoffractionalshares,youwillreceiveacheckfromthedistributionagentinanamountequaltoyourproratashareoftheaggregatenetcashproceedsofthesales.TheFundestimatesthatitwilltakeapproximatelytwoweeksfromtheDistributionDateforthedistributionagenttocompletethedistributionsoftheaggregatenetcashproceeds.IfyouholdyoursharesofYahooscommonstockthroughabankorbrokeragefirmandareentitledtoreceiveapaymentinlieuoffractionalshares,yourbankorbrokeragefirmwillreceive,onyourbehalf,yourproratashareoftheaggregatenetcashproceedsofthesales,andwillelectronicallycredityouraccountforyourshareofsuchproceeds.ResultsoftheSpinOffBasedon[]sharesofYahooscommonstockoutstandingon[],2015,andthedistributionratioofoneshareoftheFundsCommonStockforeach[]wholeshare[s]ofYahooscommonstock,theFundexpectstohaveoutstandingapproximately[]sharesofitsCommonStockimmediatelyaftertheSpinOff.TheactualnumberofsharesoftheFundsCommonStocktobedistributedintheSpinOffwilldependontheactualnumberofwholesharesofYahooscommonstockoutstandingontheRecordDate.ImmediatelyfollowingtheSpinOff,theFundexpectstohaveapproximately[]stockholdersofrecordbasedonthenumberofstockholdersofrecordofYahooscommonstockon[],2015.167/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 24/70TableofContentsMannerofEffectingtheSpinOffYahooiseffectingtheSpinOffbydistributingtoholdersofitscommonstockasadividendonewholeshareoftheFundsCommonStockforeach[]wholeshare[s]ofYahooscommonstockheldbyaYahoostockholderasoftheRecordDate.StockholdersofYahooarenotbeingaskedtotakeanyactioninconnectionwiththeSpinOff.NostockholderapprovaloftheSpinOffisrequiredorbeingsought.NeitherYahoonortheFundisaskingyouforaproxy,andyouarerequestednottosendtheFundaproxy.YouarenotrequiredtopayanyconsiderationorgiveupanyportionofyourYahoocommonstocktoreceivesharesoftheFundsCommonStockintheSpinOff.FollowingtheRecordDateandonorpriortotheDistributionDate,YahoowilldeliveralloftheissuedandoutstandingsharesoftheFundsCommonStocktothedistributionagent.IfyouownsharesofYahooscommonstockontheRecordDate,thesharesoftheFundsCommonStockthatyouareentitledtoreceiveintheSpinOffwillbeissuedelectronically,asoftheDistributionDate,toyouoryourbankorbrokeragefirmonyourbehalfindirectregistrationinbookentryform,whichweexpecttooccurwithinonebusinessdayoftheDistributionDate.IfyouholdphysicalcertificatesthatrepresentyoursharesofYahooscommonstock,oryouholdyoursharesindirectregistrationinbookentryform,andyouaretheregisteredholderofsuchshares,thedistributionagentorthetransferagentwillthenmailyouadirectregistrationaccountstatementthatindicatesthenumberofsharesoftheFundsCommonStockthathavebeenregisteredinbookentryforminyourname.Registrationinbookentryformreferstoamethodofrecordingshareownershipwhennophysicalsharecertificatesareissuedtostockholders,asisthecaseintheSpinOff.IfanystockholderofYahoosellssharesofYahooscommonstockontheregularwaymarketuptoandincludingthroughtheDistributionDate,thenthebuyerofthoseshares,andnottheseller,willbecomeentitledtoreceivethesharesoftheFundsCommonStockissuableinrespectofthesharessold.MostYahoostockholdersholdtheircommonstockthroughabankorbrokeragefirm.Insuchcases,thebankorbrokeragefirmwouldbesaidtoholdthesharesinstreetname,andownershipwouldberecordedonthebankorbrokeragefirmsbooks.IfyouholdyoursharesofYahooscommonstockthroughabankorbrokeragefirm,yourbankorbrokeragefirmwillcredityouraccountfortheFundCommonStockyouareentitledtoreceiveintheSpinOffandwillreceive,onyourbehalf,yourproratashareoftheaggregatenetcashproceedsfromthesaleofanyfractionalshares,andwillelectronicallycredityouraccountforyourshareofsuchproceeds.IfyouhaveanyquestionsconcerningthemechanicsofhavingtheFundsCommonStockheldinstreetname,pleasecontactyourbankorbrokeragefirm.EffectiveTimeoftheSpinOffYahoointendstoeffecttheSpinOffontheDistributionDate.Listing,TradingandMarketoftheFundsCommonStockOnthedateofthisinformationstatement,theFundisawhollyownedsubsidiaryofYahoo.Accordingly,thereisnopublicmarketfortheFundsCommonStock.TheFundhasappliedtolistitsCommonStockon[]underthesymbol[].TheFundcannotpredictthepriceatwhichitsCommonStockwilltradeaftertheSpinOff.Infact,thecombinedtradingprices,aftertheSpinOff,ofthesharesoftheFundsCommonStockthatYahoostockholderswillreceiveintheSpinOffandtherelatedsharesofYahooscommonstockheldattherecorddatemaynotequaltheregularwaytradingpriceofsuchsharesofYahooscommonstockimmediatelypriortotheSpinOff.ThepriceatwhichtheFundsCommonStocktradesmayfluctuatesignificantly,particularlyuntilanorderlypublicmarketdevelops.SharesofclosedendinvestmentcompaniesliketheFundfrequentlytradeatadiscountfromnetassetvalue.TradingpricesoftheFundsCommonStockwillbedeterminedinthepublicmarketsandmaybeinfluencedbymanyfactors.SeethesectionentitledRiskFactorsRisksRelatedtotheFundsCommonStockandtheSecuritiesMarketFollowingtheSpinOff.177/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 25/70TableofContentsTradingPriortotheRecordDatePriortotheRecordDate,YahooscommonstockwillcontinuetotradeontheNasdaqGlobalSelectMarketintheregularway.Therefore,ifyouownsharesofYahooscommonstockandsellthosesharespriortotheRecordDate,sothatyouarenottherecordholderofsuchsharesontheRecordDate,youwillalsobesellingyouropportunitytoreceivesharesoftheFundsCommonStockthatwouldhavebeendistributedtoyouintheSpinOffwithrespecttothesharesofYahooscommonstockyousell.TradinginYahoosCommonStockBetweentheRecordDateandDistributionDateBeginningonorshortlybeforetheRecordDate,andcontinuinguptoandincludingthroughtheDistributionDate,YahooexpectsthattherewillbetwomarketsinYahooscommonstock:aregularwaymarketandanexdistributionmarket. SharesofYahooscommonstockthattradeontheregularwaymarketwilltradewithanentitlementtotheFundsCommonStockdistributedpursuanttotheSpinOff.Therefore,ifyousellYahooscommonstockintheregularwaymarketuptoandincludingthroughtheDistributionDate,youwillbesellingyourrighttoreceivetheFundsCommonStockintheSpinOff. SharesofYahooscommonstockthattradeontheexdistributionmarketwilltradewithoutanentitlementtotheFundsCommonStockdistributedpursuanttotheSpinOff.IfyouownYahooscommonstockontheRecordDateandsellthosesharesontheexdistributionmarketuptoandincludingthroughtheDistributionDate,youwillreceivetheFundsCommonStockthatyouareentitledtoreceivepursuanttoyourownership,asoftheRecordDate,ofYahooscommonstock.OnthefirsttradingdayfollowingtheDistributionDate,YahooscommonstockwilltradeontheregularwaymarketwithoutanentitlementtotheFundsCommonStock.TradingintheFundsCommonStockBetweentheRecordDateandDistributionDateWeanticipatethat,beginningonorshortlybeforetheRecordDate,tradingintheFundsCommonStockwillbeginonawhenissuedbasisandwillcontinueuptoandincludingthroughtheDistributionDate.ThistypeoftradingreferstoasaleorpurchaseoftheFundsCommonStockmadeconditionallyonorbeforetheDistributionDate,becausetheFundsCommonStockhasnotyetbeendistributed.IfyouownYahooscommonstockontheRecordDateyouwillbeentitledtotheFundsCommonStockdistributedpursuanttotheSpinOff.YoumaytradethisentitlementtosharesoftheFundsCommonStock,withouttradingYahooscommonstockyouown,onthewhenissuedmarket.OnthefirsttradingdayfollowingtheDistributionDate,whenissuedtradingwithrespecttotheFundsCommonStockwillend,andtheFundsCommonStockwillbeginregularwaytradingon[]underthesymbol[].ConditionsPrecedenttotheSpinOffTheSeparationandDistributionAgreementwillprovidethatthecompletionoftheSpinOffissubjecttothesatisfactionofthefollowingconditions,eachofwhichmaybewaived,inwholeorinpart(totheextentpermittedbyapplicablelaw),byYahooinitssoleandabsolutediscretion. TheboardofdirectorsofYahooshallhaveapprovedtheSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andanyAncillaryAgreement(eachasdefinedbelow),includingthesettingoftheRecordDateandthedeclarationofthedividendoftheFundsCommonStock,whichapprovalmaybegivenorwithheldatitssoleandabsolutediscretion. TheBoardofDirectorsoftheFund(theBoardortheBoardofDirectors,andeachmemberoftheBoardaDirectorandtogethertheDirectors)shallhaveapprovedcompliancepoliciesandprocedures,andcausedtheFundtoenterintosuchagreements,andtakesuchotheractionsasreasonablynecessarytoensurethattheFundwillnotviolatetheUnitedStatesfederalsecuritieslaws.187/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 26/70TableofContents TheregistrationstatementundertheSecuritiesExchangeActof1934(the1934Act)relatingtotheFundsCommonStockshallhavebecomeeffective,withnostoporderineffectwithrespectthereto,andwithnoproceedingsforsuchpurposependingorthreatenedbytheSEC,andthisInformationStatementshallhavebeenprovidedtoholdersofYahooscommonstockasoftheRecordDate. TheFundshallhaveregisteredasaninvestmentcompanyunderthe1940Act,suchregistrationshallnothavebeenwithdrawn,norevocationofregistrationshallhavebeenissued,andnoproceedingforsuchpurposeshallbependingorthreatenedbytheSEC. AllotheractionsandfilingsnecessaryorappropriateunderapplicablefederalorstatesecuritieslawsandstateblueskylawsinconnectionwiththeSpinOffshallhavebeentakenormade. YahooshallhavereceivedafavorableprivateletterrulingfromtheIRSregardingcertainU.S.federalincometaxaspectsoftheSpinOff(theIRSRuling),whichrulingshallremaininfullforceandeffect,andshallnothavebeenmodifiedoramendedinanyrespectadverselyaffectingtheU.S.federalincometaxtreatmentoftheSpinOff. YahooshallhavereceivedanopinionfromSkadden,Arps,Slate,Meagher&FlomLLP(SkaddenArps)(whichopinionmayrelyupontheeffectivenessandcontinuedvalidityoftheIRSRuling),informandsubstancereasonablyacceptabletoYahoo,substantiallytotheeffectthattheSpinOffwillqualifyasataxfreetransactiontoYahooanditsstockholdersunderSections355and368(a)(1)(D)oftheInternalRevenueCodeof1986,asamended(theCode),andthat,forU.S.federalincometaxpurposes,(1)nogainorlosswillberecognizedbyYahoouponthedistributionoftheFundsCommonStockintheSpinOff,and(2)nogainorlosswillberecognizedby,andnoamountwillbeincludedintheincomeof,holdersofYahooscommonstockuponthereceiptofsharesoftheFundsCommonStockintheSpinOff(exceptwithrespecttothereceiptofcashinlieuoffractionalsharesoftheFundsCommonStock). Yahooshallhavereceivedanopinionfromanationallyrecognizedvaluationfirm,informandsubstanceacceptabletoYahoo,substantiallytotheeffectthat,amongotherthings,(1)YahoohasadequatecapitalsurplusundertheDelawareGeneralCorporationLawtoeffecttheSpinOff,and(2)aftergivingeffecttotheSpinOff,Yahoowillbesolvent. TheFundsCommonStocktobedistributedpursuanttotheSpinOffandrelatedtransactionsshallhavebeenacceptedforlistingon[],subjecttoofficialnoticeofissuance. ThetransactionscontemplatedbytheTransferAgreementshallhavebeencompleted. TheTaxMattersAgreementandtheAncillaryAgreementsshallhavebeenexecutedanddeliveredbyeachofthepartiestheretoandnopartytotheTaxMattersAgreementoranyoftheAncillaryAgreementsshallbeinmaterialbreachofanysuchagreement. AllgovernmentalapprovalsandconsentsnecessarytoconsummatetheSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andanyAncillaryAgreementshallhavebeenobtainedandbeinfullforceandeffect. Nopreliminaryorpermanentinjunctionorotherorder,decree,orrulingissuedbyagovernmentalauthority,andnostatute(asinterpretedthroughordersorrulesofanygovernmentalauthoritydulyauthorizedtoeffectuatethestatute),rule,regulation,orexecutiveorderpromulgatedorenactedbyanygovernmentalauthorityshallbeineffectpreventingtheconsummationof,ormateriallylimitingthebenefitsof,theSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andanyAncillaryAgreement. Noothereventordevelopmentshallhaveoccurredorfailedtooccurthat,inthejudgmentoftheboardofdirectorsofYahooinitssolediscretion,preventstheconsummationoftheSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreement,theTaxMattersAgreement,197/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 27/70TableofContentstheTransferAgreement,andanyAncillaryAgreement,ormakestheconsummationofsuchtransactionsinadvisable.Yahoohasreservedtheright,initssoleandabsolutediscretion,toabandonormodifythetermsoftheSpinOffatanytimepriortotheDistributionDate,eveniftheconditionstotheSpinOffhavebeensatisfied.AmountandSourceofFundsforExpensesRelatingtotheSpinOffItisexpectedthatYahoowillincuranaggregateof$[]millioninexpensesinconnectionwiththeSpinOff.ExceptasotherwiseexpresslysetforthintheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreementoranyAncillaryAgreement,orasotherwiseagreedbyYahooandtheFund,alloutofpocketfees,costsandexpensespaidorincurredinconnectionwiththeSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreementwillbebornebythecompanyincurringsuchfees,costsorexpenses.TransferabilityofSharesoftheFundsCommonStockYouReceiveSharesoftheFundsCommonStockdistributedtoYahoostockholderswillbefreelytransferable,exceptforsharesreceivedbypersonswhomaybedeemedtobeaffiliatesoftheFundundertheSecuritiesActof1933(the1933Act).PersonswhomaybedeemedtobeaffiliatesoftheFundaftertheSpinOffgenerallyincludeindividualsorentitiesthatcontrol,arecontrolledby,orareundercommoncontrolwiththeFund,andmayincludeDirectorsandcertainofficersorprincipalstockholdersoftheFund.AffiliatesoftheFundwillbepermittedtoselltheirsharesoftheFundsCommonStockonlypursuanttoaneffectiveregistrationstatementunderthe1933Actoranexemptionfromtheregistrationrequirementsofthe1933Act,suchastheexemptionsaffordedbyRule144.NoAppraisalRightsUndertheGeneralCorporationLawoftheStateofDelaware,underwhichYahooisincorporated,holdersofYahooscommonstockwillnothaveappraisalrightsinconnectionwiththeSpinOff.ReasonsforProvidingthisInformationStatementThisinformationstatementisbeingprovidedsolelytogiveinformationabouttheFundtoYahoostockholderswhowillreceivesharesoftheFundsCommonStockintheSpinOff.TheFundbelievesthattheinformationcontainedinthisinformationstatementisaccurateasofthedatesetforthonthecover.Changestotheinformationcontainedinthisinformationstatementmayoccurafterthatdate,andneithertheFundnorYahooundertaketoupdatetheinformationexceptinthenormalcourseoftheirrespectivepublicdisclosureobligationsandpractices.RelationshipBetweenYahooandtheFundFollowingtheSpinOffFollowingtheSpinOff,theFundandYahoowilloperateindependentlyofeachother,andneitherwillhaveanyownershipinterestintheotherasaresultoftheSpinOff.However,directors,officers,andemployeesofYahoowhoownsharesofYahooscommonstockontheRecordDatewillreceivesharesoftheFundsCommonStockinconnectionwiththeSpinOffinthesameratioasotherYahoostockholders.InconnectionwiththeSpinOff,theFundandYahoo(orcertainoftheirrespectivesubsidiaries)areenteringintoagreementsinordertogoverntherelationshipsbetweentheFundandYahoo(andcertainoftheirrespectivesubsidiaries)aftertheSpinOff,andtoprovideforanorderlytransition.TheFundwillenterintoaseparationanddistributionagreement(theSeparationandDistributionAgreement)withYahoowhichwillsetforth,amongotherthings,theprincipalcorporatetransactionsrequiredtoeffecttheSpinOff,theconditionsto207/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 28/70TableofContentstheSpinOff,andongoingobligationsoftheFundandYahoofollowingcompletionoftheSpinOff.TheFundwillalsoenterintoataxmattersagreement(theTaxMattersAgreement)withYahoothatwillgovernYahoosandtheFundsrespectiverights,responsibilities,andobligationswithrespecttotaxesandtaxbenefits,thefilingoftaxreturns,thecontrolofaudits,andothertaxmatters.YahooandASBwillenterintoaTransferAgreement(theTransferAgreement)pursuanttowhichYahoowilltransfertoASBsubstantiallyalloftheassetsexclusivelyrelatingtothebusinesshistoricallyoperatedbyYahooasYahooSmallBusiness,subjecttocertainexcludedassetsidentifiedintheTransferAgreement,andASBwillassumealloftheliabilitiesrelatingtosuchassetsandbusiness.TheFund,YahooandcertainoftheirrespectivesubsidiarieswillenterintootheragreementsprimarilyintendedtofacilitatetheoperationsofASBfollowingtheSpinOff(theAncillaryAgreements).SeparationandDistributionAgreementTheSeparationandDistributionAgreementwillcontainthekeyprovisionsrelatingtotheseparationoftheassets,liabilities,andbusinessesoftheFundfromYahoo(theSeparation).ItalsowillsetforthcertainongoingobligationsofYahooandtheFundthatwillcontinueafterthecompletionoftheSeparation.ForpurposesoftheSeparationandDistributionAgreement:(1)theFundEntitiesmeanstheFundandeachofitssubsidiaries,and(2)theYahooEntitiesmeansYahooandeachofYahoossubsidiariesotherthantheFundEntities.TransfersofAssetsandAssumptionofLiabilities.TheSeparationandDistributionAgreementwillallocate,totheextentnotpreviouslyaccomplishedpursuanttotheTransferAgreement,theassetsandliabilitiesofYahooanditssubsidiariesbetweentheFundEntitiesandtheYahooEntities,andwilldescribewhenandhowanyrequiredtransfersandassumptionsofassetsandliabilitieswilloccur.TerminationofIntercompanyAgreements.EffectiveasoftheDistributionDate,allagreementsbetweenanymemberoftheYahooEntities,ontheonehand,andanymemberoftheFundEntities,ontheotherhand,existingpriortotheSpinOff(excludingtheSeparationandDistributionAgreement,anyagreementsidentifiedintheapplicablescheduletotheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreement,andtheAncillaryAgreements)willbeterminated.SettlementofIntercompanyAccounts.Anyreceivables,payables,orloansbetweenanymemberoftheYahooEntities,ontheonehand,andanymemberoftheFundEntities,ontheotherhand,existingpriortotheSpinOffwillbesatisfiedand/orsettledincashorotherwisecanceled.TheSpinOff.TheSeparationandDistributionAgreementalsowillgoverntherightsandobligationsofYahooandtheFundregardingtheSpinOff.OntheDistributionDate,Yahoowillcausethedistributionagenttodistribute,onaproratabasis,alloftheissuedandoutstandingsharesoftheFundsCommonStocktoYahoostockholderswhoheldYahooscommonstockasoftheRecordDate.AccesstoInformation.TheSeparationandDistributionAgreementwillprovidethatfor18monthsfollowingtheDistributionDate,YahooandtheFundwillaffordeachotheraccesstocertaininformation,subjecttoappropriaterestrictionsforclassified,privileged,orconfidentialinformation,andtopreservethecompletenessandintegrityoftheinformation.Inaddition,for18monthsaftertheDistributionDate,eachofYahooandtheFundwillusecommerciallyreasonableeffortstocooperateandconsultwitheachotherinconnectionwithanylegal,administrative,orotherproceeding,investigation,informationrequest,orexaminationinwhichtheotherpartymaybecomeinvolved,asmaybereasonablyrequired.Releases,AllocationofLiabilities,andIndemnification.TheSeparationandDistributionAgreementwillprovideforafullandcompletereleaseanddischargeofallliabilitiesexistingorarisingfromanyactsoreventsoccurringorfailingtooccurorallegedtohaveoccurredortohavefailedtooccuroranyconditionsexistingorallegedtohaveexistedatorbeforetheSeparation,betweenoramonganymemberoftheYahooEntitiesandanymemberoftheFundEntities,exceptasexpresslysetforthintheSeparationandDistributionAgreement.217/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 29/70TableofContentsTheSeparationandDistributionAgreementwillprovidethat:(1) theFundwillindemnifyeachmemberoftheYahooEntities,eachaffiliateofsuchmember,andeachoftheirrespectivecurrentandformerstockholders,members,directors,officers,managers,agents,andemployeesagainstanyandalllosses(otherthanlossesthatareexpresslycoveredbytheTaxMattersAgreement)relatingto: a) liabilitiesarisingoutoftheFundsbusinesses,andb) anybreachbyanymemberoftheFundEntitiesofanyprovisionoftheSeparationandDistributionAgreement,theTransferAgreement,oranyAncillaryAgreementand(2) YahoowillindemnifyeachmemberoftheFundEntities,eachaffiliateofsuchmember,andeachoftheirrespectivecurrentandformerstockholders,members,directors,officers,managers,agents,andemployeesagainstanyandalllosses(otherthanlossesthatareexpresslycoveredbytheTaxMattersAgreement)relatingto: a) liabilitiesarisingoutofYahoosbusinesses,andb) anybreachbyanymemberoftheYahooEntitiesofanyprovisionoftheSeparationandDistributionAgreement,theTransferAgreement,oranyAncillaryAgreement.TheSeparationandDistributionAgreementwillprovideYahoowiththerighttocontrolthelitigationandsettlementofcertainlitigationmattersthatwereassertedagainstamemberofeachoftheYahooEntitiesandtheFundEntities,orthatrelatetocertainaspectsofASBsbusiness,andthatwereassertedbeforetheSeparation,aswellascertainotherlitigationmattersthatwereassertedbefore,orareassertedafter,theSeparation.TheSeparationandDistributionAgreementalsowillprovidefortheallocationofliabilitiesandexpensesbetweenYahooandtheFundwithrespecttothesematters.Italsowillestablishprocedureswithrespecttoclaimssubjecttoindemnification,insuranceclaims,andrelatedmatters.IndemnificationwithrespecttotaxeswillbegovernedbytheTaxMattersAgreement.Expenses.ExceptasotherwiseexpresslysetforthintheSeparationandDistributionAgreement,theTaxMattersAgreement,theTransferAgreementoranyAncillaryAgreement,orasotherwiseagreedbyYahooandtheFund,alloutofpocketfees,costsandexpensespaidorincurredinconnectionwiththeSpinOffandtheothertransactionscontemplatedbytheSeparationandDistributionAgreementwillbebornebythecompanyincurringsuchfees,costsorexpenses.TaxMattersAgreementTheTaxMattersAgreementwillgovernYahoosandtheFundsrespectiverights,responsibilities,andobligationswithrespecttotaxesandtaxbenefits,thepreparationandfilingoftaxreturns,thecontroloftaxcontestsandaudits,andothertaxmatters.ForpurposesoftheTaxMattersAgreement:(1)theFundGroupmeanstheFundandeachofitssubsidiaries,and(2)theYahooGroupmeansYahooandeachofYahoossubsidiariesotherthanthemembersoftheFundGroup.Asusedinthissummary,thetermtaxesmeansU.S.federal,stateandlocaltaxes,andforeigntaxes,togetherwithanyinterest,penalties,additionstotax,oradditionalamountsinrespectofsuchtaxes,andthetermTaxrelatedlossesgenerallyreferstolossesarisingfromthefailureoftheSpinOffandrelatedrestructuringtransactionstobetaxfreetoYahoo,theFund,theirrespectivesubsidiaries,andYahoostockholders.UndertheTaxMattersAgreement,exceptasdescribedbelow,Yahoowillbeallocated(1)alltaxesattributabletomembersoftheYahooGroup,andalltaxesattributabletomembersoftheFundGroupforapreSpinOfftaxperiod(orthepreSpinOffportionofastraddletaxperiod),thatarereportedonanytaxreturnthatincludesoneormoremembersoftheYahooGroupandoneormoremembersoftheFundGroup,(2)alltaxesattributabletomembersoftheYahooGroupthatarereportedonanytaxreturnthatincludesonlymembersofthe227/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 30/70TableofContentsYahooGroup,and(3)alltaxesattributabletoAabacoHongKongforapreSpinOfftaxperiod(orthepreSpinOffportionofastraddletaxperiod).Generally,exceptasdescribedbelow,theFundwillbeallocated(1)alltaxesattributabletomembersoftheFundGroupforapostSpinOfftaxperiod(orthepostSpinOffportionofastraddletaxperiod)thatarereportedonanytaxreturnthatincludesoneormoremembersoftheYahooGroupandoneormoremembersoftheFundGroup,and(2)alltaxesattributabletomembersoftheFundGroupthatarereportedonanytaxreturnthatincludesonlymembersoftheFundGroup(otherthantaxesattributabletoAabacoHongKongforapreSpinOfftaxperiod(orthepreSpinOffportionofastraddletaxperiod)).Notwithstandingtheforegoing,thefollowingspecialruleswillapply: Ingeneral,exceptasotherwisedescribedbelow,theFundwillbeallocatedanytaxesandTaxrelatedlossesresultingfromtheSpinOffandrelatedrestructuringtransactions. Withoutlimitingthegeneralityoftheforegoing,theFundwillbeallocatedanytaxesandTaxrelatedlossesresultingfromtheSpinOffandrelatedrestructuringtransactionsthat(1)resultprimarilyfrom,individuallyorintheaggregate,anybreachbytheFundofanyofitsrepresentationsandcovenantsdescribedbelow,or(2)resultfromtheapplicationofSection355(e)oftheCodetotheSpinOffasaresultofthetreatmentoftheSpinOffaspartofaplan(orseriesofrelatedtransactions)pursuanttowhichoneormorepersonsacquire,directlyorindirectly,stockrepresentinga50percentorgreaterinterestinthestockoftheFund.Inaddition,theFundwillbeallocatedanytaxesandTaxrelatedlossesthatresultfromtheapplicationofChinastaxrulesonindirectsharetransfers,Bulletin7(asdefinedbelow),totheSpinOffandrelatedrestructuringtransactions. YahoowillbeallocatedanytaxesandTaxrelatedlossesresultingfromtheSpinOffandrelatedrestructuringtransactionsthat(1)resultprimarilyfrom,individuallyorintheaggregate,anybreachbyYahooofanyofitsrepresentationsandcovenantsdescribedbelow,or(2)resultfromtheapplicationofSection355(e)oftheCodetotheSpinOffasaresultofthetreatmentoftheSpinOffaspartofaplan(orseriesofrelatedtransactions)pursuanttowhichoneormorepersonsacquire,directlyorindirectly,stockrepresentinga50percentorgreaterinterestinthestockofYahoo. YahooandtheFundwilleachbeallocated50percentofanytransfertaxesarisingfromtheSpinOffandrelatedrestructuringtransactions.YahoowillberesponsibleforpreparingandfilingalltaxreturnsthatincludeoneormoremembersoftheYahooGroupplusoneormoremembersoftheFundGroup.Inaddition,eachpartywillberesponsibleforpreparingandfilingtaxreturnsthatincludeonlymembersofsuchpartysgroup.OnanytaxreturnforwhichtheFundisresponsible,theFundandthemembersoftheFundGroupwillberequiredtoallocatetaxitemsbetweensuchtaxreturnandanyrelatedtaxreturnforwhichYahooisresponsiblethatisfiledwithrespecttothesametaxyearinamannerthatisconsistentwiththereportingofsuchtaxitemsonthetaxreturnpreparedbyYahoo.ThepartieswillberequiredtofilealltaxreturnsinamannerconsistentwiththeIRSRulingandthetaxopiniondeliveredtoYahooinconnectionwiththeSpinOff.Further,undertheTaxMattersAgreement,amendedtaxreturnswithrespecttotheFundGroupmayonlybefiledbythepartyresponsibleforfilingtheoriginaltaxreturn,andtheconsentofYahoowillberequiredwithrespecttothefilingofanyamendedtaxreturnbytheFundthatislikelytoincreasethetaxesorindemnityobligationsofYahoobymorethanademinimisamount(unlesstheFundotherwiseagreestopaysuchincrementaltaxesorobligations).Generally,eachpartywillbeentitledtoanyrefunds,credits,oroffsetsoftaxesallocatedtoandpaidbysuchpartypursuanttotheTaxMattersAgreement.IftheFundrequestsinwritingthatYahooobtainarefund,credit,oroffsetoftaxeswithrespecttothecarrybackofanytaxattributeoftheFundorthemembersoftheFundGrouptoapreSpinOfftaxperiod,Yahoowillberequiredtotakereasonablemeasurestoobtainarefund,credit,oroffsetoftaxeswithrespecttosuchcarrybackhowever,theFundwillonlybeentitledtosuchrefund,credit,oroffsetoftaxesattributable(onalastdollarbasis)tosuchcarrybackandonlytotheextentsuchrefund,credit,oroffsetisreceivedbyYahoo,andsuchamountwillbenetofanyoutofpocketcosts,expenses,orincreaseintaxesincurredbyYahoowithrespecttothereceiptoraccrualthereof.237/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 31/70TableofContentsEachofYahooandtheFundgenerallywillhavetheauthoritytorespondtoandcontrolalltaxproceedings,includingtaxaudits,involvinganytaxesreportedontaxreturnsforwhichitisresponsibleundertheTaxMattersAgreement,andtheothercompanywillhavetherighttoparticipate,atitsowncostandexpense,insuchtaxproceedingstotheextentsuchproceedingscouldresultinataxliabilityforwhichsuchothercompanymaybeliableundertheTaxMattersAgreement.Notwithstandingtheforegoing,YahooandtheFundwillhavetheauthoritytojointlycontrolallproceedings,includingtaxproceedings,involvinganytaxesorTaxrelatedlossesarisingfromtheSpinOfforrelatedrestructuringtransactions.TheTaxMattersAgreementwillalsoprovidefortheexchangeofinformationfortaxmatters(andconfidentialityprotectionsrelatedtosuchexchangedinformation),theretentionofrecordsthatmayaffectthetaxliabilitiesoftheparties,andcooperationbetweenYahooandtheFundwithrespecttotaxmatters.ThepartieswillbesubjecttospecifiedrestrictivecovenantswithrespecttotheSpinOffandrelatedrestructuringtransactions.Ingeneral,Yahoo,theFund,andcertainoftheirrespectivesubsidiarieswillbeprohibitedfromtaking,orfailingtotake,anyactionfollowingtheSpinOffifsuchactionorfailuretoact: wouldbeinconsistentwithorpreventcertainrestructuringtransactionsrelatedtotheSpinOfffromqualifyingfortaxfreetreatmenttoYahooanditssubsidiariesforU.S.federalincometaxpurposes wouldbeinconsistentwithorpreventtheSpinOfffromqualifyingasataxfreetransactionunderSections355and368(a)(1)(D)oftheCodetoYahoo,itssubsidiaries,andtheYahoostockholders(exceptwithrespecttothedistributionofcashinlieuoffractionalsharesoftheFundsCommonStock)or wouldbeinconsistentwith,orotherwisecauseanypersontobeinbreachof,anyrepresentation,covenant,ormaterialstatementmadeinconnectionwiththeIRSRulingorthetaxopiniondeliveredtoYahooinconnectionwiththeSpinOff.Further,eachpartywillrepresentthattherepresentationsandmaterialstatementsmadeinconnectionwiththeIRSRulingorthetaxopiniondeliveredtoYahooinconnectionwiththeSpinOff,totheextentrelatedtosuchpartyanditssubsidiaries,aretrue,correct,andcompleteinallmaterialrespects.Inaddition,thepartieswillbeprohibitedfromtakinganypositionfortaxpurposesthatisinconsistentwiththetaxopiniondeliveredtoYahooinconnectionwiththeSpinOff.Thepartieswillindemnifyeachother(andcertainrelatedpersons)fortaxesandlossesallocatedtothemundertheTaxMattersAgreement,andfortaxesandlossesarisingfromabreachoftheirrespectivecovenantsandobligationsundertheTaxMattersAgreement.TransferAgreementYahooandASBwillenterintoaTransferAgreementpursuanttowhichYahoowilltransfertoASBsubstantiallyalloftheassetsexclusivelyrelatingtothebusinesshistoricallyoperatedbyYahooasYahooSmallBusiness,subjecttocertainexcludedassetsidentifiedintheTransferAgreement.Inaddition,ASBwillassumeallliabilitiesarisingfrom,relatedto,imposedunderorpursuanttotheacquiredassetsorbusinesshistoricallyoperatedasYahooSmallBusinesswhetherarisingfromorrelatedtoanyperiodpriorto,on,oraftertheclosingofthetransfers,subjecttospecifiedretainedliabilitiesidentifiedintheTransferAgreement.TheTransferAgreementwillprovideforASBtoemploythoseemployeesofYahoowhoseemploymentprimarilyrelatestothebusinesshistoricallyoperatedasYahooSmallBusiness,andwillprovideforothermattersrelatingtotheemploymentbyASBofsuchemployees.TheclosingofthetransferswillbeheldatatimeanddatedeterminedbyYahooinitssoleandabsolutediscretion.Conditionstotheclosingofthetransferswillinclude:(1)receiptofallgovernmentalapprovals,and247/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 32/70TableofContents(2)absenceoflaws,orders,oractionsthat,orthatseekto,enjoinorotherwiseprohibittheconsummationofthetransfers.TheseconditionsmaybewaivedbyYahooinitssoleandabsolutediscretion.AncillaryAgreementsTheAncillaryAgreementsthatwillbeenteredintobytheFund,Yahooandcertainoftheirrespectivesubsidiarieswillinclude: TechnologyTransitionServicesAgreement G&ATransitionServicesAgreement IntellectualPropertyLicenseAgreement MailServicesAgreementTheAncillaryAgreementswillprovidefor(1)theprovisionofcertaintechnologyrelatedservices,onatransitionalbasis(2)theprovisionofcertaingeneralandadministrativeservices,onatransitionalbasis(3)certainnonexclusivelicensesfortheuseofcertainintellectualpropertyand(4)ASBscontinuedprovisionofYahoosbusinessemailplatformtoASBscustomers.InadditiontotheseAncillaryAgreements,ASBwilllicensecertaincontenttoYahoo,andASBwillenterintoanadvertisingreselleragreementwithYahoo.257/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 33/70TableofContentsINVESTMENTOBJECTIVEANDPOLICIESInvestmentObjectiveTheFundsinvestmentobjectiveistoseekreturnsforitsstockholdersprimarilythroughowningtheAlibabaShares.BasedontheclosingmarketpriceofAlibabaADSontheNewYorkStockExchangeon[],2015,theFundanticipatesthatthevalueofitsAlibabaShareswillexceed95percentofthevalueofitstotalassetsimmediatelyaftertheSpinOffiscompleted.TheFundsinvestmentobjectiveisnotfundamentalandmaybechangedwithoutstockholderapproval,althoughtheFundwillprovidestockholderswithatleast60daysnoticebeforeimplementinganychangetoitsinvestmentobjective.TherecanbenoassurancethattheFundwillachieveitsinvestmentobjective.InvestmentPoliciesTheFundwillseektoachieveitsinvestmentobjectivebycontinuingtoinvestatleast80percentofitstotalassetsinAlibabaSharesundernormalmarketconditions.Thispolicyisnotfundamentalandmaybechangedwithoutstockholderapproval,althoughtheFundwillprovideitsstockholderswithatleast60daysnoticebeforeimplementinganychangetothisinvestmentpolicy.TheFundhasnocurrentintentionofinvestinglessthan80percentofitstotalassetsintheAlibabaShares.BecausetheFundsinvestmentpolicyistoinvestatleast80percentofitstotalassetsintheAlibabaShares,aninvestmentintheFundisparticularlysubjecttorisksrelatingtoAlibaba.SeeRiskFactors.TheFundsinvestmentintheAlibabaShareswillcauseittobeanondiversifiedinvestmentcompanyandtoconcentrateitsinvestmentsinsecuritiesissuedbycompaniesintheonlineservicesandecommerceindustry.Asaresult,the1940ActrequirestheFundtoobtainstockholderapprovaltoinvestlessthan25percentofitstotalassetsincompaniesintheonlineservicesandecommerceindustry.TheFundhasnocurrentintentionofinvestinglessthan25percentofitstotalassetsincompaniesintheonlineservicesandecommerceindustry.Unlikemostregisteredinvestmentcompanies,theFundisnoteligibletobetreatedasaregulatedinvestmentcompanyundertheCode,asaresultoftheFundsconcentratedownershipofAlibabaShares.Instead,theFundistreatedasaregularcorporation,oraCcorporation,forU.S.federalincometaxpurposesand,unlikemostinvestmentcompanies,issubjecttocorporateincometaxtotheextenttheFundrecognizestaxableincome.Asaresult,theFundwilltakeintoaccountthetaxconsequencesofanychangetoitsinvestmentportfolio.CompliancewithanypercentagelimitationsintheFundsinvestmentpolicieswillbedeterminedatthetimeofinvestment.TheFundwillnotberequiredtopurchaseorsellsecuritiestocomplywithsuchpercentagelimitationsduetochangesinthevalueofitsinvestments.BorrowedMoneyTheFundintendstoenterintotheCreditFacilitypursuanttowhichtheFundmayborrowupto$[]million.TheFundanticipatesthatitwillinitiallyborrow$[]millionpursuanttotheCreditFacilityatoraboutthetimeofthecompletionoftheSpinOff.ThepurposeoftheinitialborrowingistoprovideworkingcapitalduringtheFundsfirstyearofoperations.TheFundcurrentlyintendstoborrowmoneyonlyforworkingcapitalandtorepurchaseitsCommonStockifandtotheextentauthorizedbyitsBoardofDirectorsfromtimetotime.TheFunddoesnotcurrentlyintendtousetheproceedsofanyborrowingtopurchaseadditionalinvestmentsecuritiesortopaydividendstostockholders,thoughitretainstherighttodoso.TheFundreservestherighttoborrowmoneytotheextentpermittedbythe1940Act.FormoreinformationregardingtheFundsborrowings,pleaseseeBorrowingsandPreferredStockBorrowings.267/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 34/70TableofContentsLoansofPortfolioSecuritiesTheFundmaylenditsAlibabaSharestogenerateincome.SuchincomemaybeusedforworkingcapitalpurposesortorepurchasetheFundsCommonStockifandtotheextentauthorizedbyitsBoardofDirectorsfromtimetotime.TheFundhasnocurrentintentionoflendingitsAlibabaSharestogenerateincometobeusedtopurchaseadditionalinvestmentsecuritiesorpaydividendstostockholders,thoughitretainstherighttodoso.Consistentwithapplicableregulatoryrequirements,theFundmaylendAlibabaSharestobrokerdealersorfinancialinstitutions,providedthatsuchloansarecallableatanytimebytheFund(subjecttonoticeprovisionsdescribedbelow),andareatalltimessecuredbycashorcashequivalents,whichareearmarkedorsegregatedpursuanttoapplicableregulations,andthatareatleastequaltothemarketvalue,determineddaily,oftheloanedAlibabaShares.AnyloansoftheAlibabaSharesbytheFundwillbecollateralizedinaccordancewithapplicableregulatoryrequirementsandnoloanwillcausethevalueofallloanedAlibabaSharestoexceedonethirdofthevalueoftheFundstotalassets.AloanofAlibabaSharesgenerallymaybeterminatedbytheborrowerononebusinessdaysnotice,orbytheFundonfivebusinessdaysnotice.IftheborrowerfailstodelivertheloanedAlibabaShareswithinfivedaysafterreceiptofnotice,theFundcouldusethecollateraltopurchasereplacementAlibabaShareswhileholdingtheborrowerliableforanyexcessofreplacementcostovercollateral.Aswithanyextensionsofcredit,therearerisksofdelayinrecovery,andinsomecasesevenlossofrightsinthecollateralshouldtheborroweroftheAlibabaSharesfailfinancially.However,loansofAlibabaShareswillbemadeonlytofirmsdeemedbytheFundsmanagementtobecreditworthyandwhentheincomethatcanbeearnedfromsuchloansjustifiestheattendantrisks.TheBoardofDirectorswilloverseethecreditworthinessofthecontractingpartiesonanongoingbasis.Uponterminationoftheloan,theborrowerisrequiredtoreturntheAlibabaSharestotheFund.AnygainorlossinthemarketpriceduringtheloanperiodwouldinuretotheFund.IfthecounterpartytotheloanpetitionsforbankruptcyorbecomessubjecttotheUnitedStatesBankruptcyCode,thelawregardingtherightsoftheFundisunsettled.Asaresult,underextremecircumstances,theremaybearestrictionontheFundsabilitytosellthecollateral,andtheFundwouldsufferaloss.WhenvotingorconsentrightsthataccompanyloanedAlibabaSharespasstotheborrower,theFundwillfollowthepolicyofcallingtheloanedsecurities,tobedeliveredwithinonedayafternotice,topermittheexerciseofsuchrightsifthemattersinvolvedwouldhaveamaterialeffectontheFundsinvestmentintheAlibabaShares.TheFundwillpayreasonablefinders,administrative,andcustodialfeesinconnectionwithaloanofitsAlibabaShares.TheAlibabaOrdinarySharesarenotlistedfortradingontheNewYorkStockExchangeoranyothernationalsecuritiesexchange.InordertolendAlibabaOrdinarySharestoinvestors,theFundmustfirstdepositthemwiththeDepositaryinexchangeforAlibabaADSandthenlendtheAlibabaADS.HedgingandDerivativeInstrumentsTheFundhasadoptedapolicyofnotseekingtohedgerisksrelatedtoitsinvestmentintheAlibabaSharesbecausetheFundseeksreturnsbasedonitsinvestmentintheAlibabaShares.Asaresult,theFundcurrentlydoesnotanticipateinvestinginderivativeinstrumentsorusingthemforhedgingpurposes,althoughtheFundretainstherighttodoso.FundamentalInvestmentRestrictionsTheFundhasadoptedrestrictionsandpoliciesrelatingtotheinvestmentofitsassetsanditsactivities.Asrequiredbythe1940Act,certainoftherestrictionsarefundamentalandmaynotbechangedwithouttheapprovalofa1940ActMajorityoftheFundsoutstandingvotingsecurities,includingtheapprovalofa1940ActMajorityoftheFundsoutstandingsharesofpreferredstock,ifany,votingasaseparateclass.A1940Act277/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 35/70TableofContentsMajoritymeansthelesserof(a)67percentormoreoftheFundsoutstandingvotingsecuritiespresentatastockholdersmeeting,iftheholdersofmorethan50percentoftheFundsoutstandingvotingsecuritiesarepresentorrepresentedbyproxyatthemeeting,or(b)morethan50percentoftheFundsoutstandingvotingsecurities.Underthesefundamentalinvestmentrestrictions,theFundmaynot:1. Concentrateitsinvestmentsinaparticularindustry,asthattermisusedinthe1940Act,exceptthatFundwillconcentrateitsinvestmentsincompaniesoperatingintheonlineservicesandecommerceindustry. 2. Borrowmoney,exceptaspermittedunderthe1940Act. 3. Issueseniorsecuritiestotheextentsuchissuancewouldviolatethe1940Act. 4. Purchaseorholdrealestate,otherthanforuseintheoperationsofeithertheFundorASB.5. Underwritesecuritiesissuedbyothers,excepttotheextentthatthesaleofportfoliosecurities(includingwithoutlimitationtheAlibabaShares)bytheFundmaybedeemedtobeanunderwritingorasotherwisepermittedbyapplicablelaw. 6. Purchaseorsellcommoditiesorcommoditycontracts,exceptaspermittedbythe1940Act. 7. Makeloanstotheextentprohibitedbythe1940Act.ThefollowingexplanationsoftheFundsfundamentalinvestmentrestrictionsarenotconsideredtobepartoftheFundsfundamentalinvestmentrestrictions,andaresubjecttochangewithoutstockholderapproval.Withrespecttothefundamentalpolicyrelatingtoconcentrationsetforthin(1)above,the1940Actdoesnotdefinewhatconstitutesconcentrationinanindustry.TheSECstaffhastakenthepositionthatinvestmentof25percentormoreofaninvestmentcompanystotalassetsinoneormoreissuersconductingtheirprincipalactivitiesinthesameindustryorgroupofindustriesconstitutesconcentration.Itispossiblethatinterpretationsofconcentrationcouldchangeinthefuture.Thepolicyin(1)abovewillbeinterpretedtorefertoconcentrationasthattermmaybeinterpretedfromtimetotime.Thepolicyalsowillbeinterpretedtopermitinvestmentwithoutlimitinthefollowing,ifandtotheextenttheFundweretoinvestmorethan25percentofitstotalassetsinanyofthefollowinginstruments:securitiesoftheU.S.Governmentanditsagenciesorinstrumentalitiestaxexemptsecuritiesofstate,territory,possession,ormunicipalgovernmentsandtheirauthorities,agencies,instrumentalities,orpoliticalsubdivisionsandrepurchaseagreementscollateralizedbyanysuchobligations.Accordingly,issuersoftheforegoingsecuritieswillnotbeconsideredtobemembersofanyindustry.Therealsowillbenolimitoninvestmentinissuersdomiciledinasinglejurisdictionorcountry.Financecompanieswillbeconsideredtobeintheindustriesoftheirparentsiftheiractivitiesareprimarilyrelatedtofinancingtheactivitiesoftheparents.Eachforeigngovernmentwillbeconsideredtobeamemberofaseparateindustry.ThepolicyalsowillbeinterpretedtogivebroadauthoritytotheFundastohowtoclassifyissuerswithinoramongindustries.Withrespecttothefundamentalpolicyrelatingtoborrowingmoneysetforthin(2)above,the1940ActpermitstheFundtoborrowmoneyinamountsofuptoonethirdoftheFundstotalassetsforanypurpose,andtoborrowuptofivepercentoftheFundstotalassetsfortemporarypurposes.TheFundstotalassetsincludetheamountsbeingborrowedandretainedbytheFundincash,securities,orotherproperty.Tolimittherisksattendanttoborrowing,the1940ActrequirestheFundtomaintainatalltimesanassetcoverageofatleast300percentoftheamountofitsborrowingsandofatleast200percentoftheliquidationpreferenceofanypreferredstockthatitissues.ImmediatelyaftertheSpinOff,theFundwillhavenosharesofpreferredstockoutstanding,andtheFundhasnocurrentintentiontoissuepreferredstock.AssetcoveragemeanstheratiothatthevalueoftheFundstotalassets(includingamountsborrowed),minusliabilitiesotherthanborrowings,bearstotheaggregateamountofallborrowings.Borrowingmoneytoincreaseportfolioholdingsisknownasleveraging.Certaintradingpracticesandinvestments,suchasreverserepurchaseagreements,maybeconsideredtobeborrowingsorinvolveleverage,andthusaresubjecttothe1940Actrestrictions.InaccordancewithSECstaff287/18/2015 FormN2http://www.sec.gov/Archives/edgar/data/1646775/000119312515256057/d122862dn2.htm 36/70TableofContentsguidanceandinterpretations,whentheFundengagesinsuchtransactions,theFund,insteadofmaintainingassetcoverageofatleast300percent,maysegregateorearmarkliquidassets,orenterintoanoffsettingposition,inanamountatleastequaltotheFundsexposure,onamarktomarketbasis,tothetransaction(ascalculatedpursuanttorequirementsoftheSEC).Thepolicyin(2)abovewillbeinterpretedtopermittheFundtoengageintradingpracticesandinvestmentsthatmaybeconsideredtobeborrowingortoinvolveleveragetotheextentpermittedbythe1940Act,andtopermittheFundtosegregateorearmarkliquidassetsorenterintooffsettingpositionsinaccordancewithSECstaffguidanceandinterpretations.Shorttermcreditsnecessaryforthesettlementofsecuritiestransactionsandarrangementswithrespecttosecuritieslendingwillnotbeconsideredtobeborrowingsunderthepolicy.Practicesandinvestmentsthatmayinvolveleveragebutarenotconsideredtobeborrowingsarenotsubjecttothepolicy.AlthoughtheFundreservestherighttoborrowmoneytotheextentpermittedbythe1940Act,itcurrentlyintendstoborrowmoneyonlyforworkingcapitalandtorepurchaseitsCommonStockifandtotheextentauthorizedbyitsBoardofDirectorsfromtimetotime.TheFunddoesnotcurrentlyintendtousetheproceedsofanyborrowingtopurchaseadditionalinvestmentsecuritiesortopaydividendstostockholders,thoughitretainstherighttodoso.Withrespecttothefundamentalpolicyrelatingtounderwritingsetforthin(5)above,the1940ActdoesnotprohibittheFundfromengagingintheunderwritingbusinessorfromunderwritingthesecuritiesofotherissuers.Afundengagingintransactionsinvolvingtheacquisitionordispositionofportfoliosecuritiesmaybeconsideredtobeanunderwriterunderthe1933Act.Althoughitisnotbelievedthattheapplicationofthe1933ActprovisionsdescribedabovewouldcausetheFundtobeengagedinthebusinessofunderwriting,thepolicyin(5)abovewillbeinterpretednottopreventtheFundfromengagingintransactionsinvolvingtheacquisitionordispositionofportfoliosecurities,regardlessofwhethertheFundmaybeconsideredtobeanunderwriterunderthe1933Actorisotherwiseengagedintheunderwritingbusinesstotheextentpermittedbyapplicablelaw.Withrespecttothefundamentalpolicyrelatingtolendingsetforthin(7)above,the1940ActdoesnotprohibittheFundfrommakingloans(includinglendingitssecurities)however,SECstaffinterpretationscurrentlyprohibitregisteredinvestmentcompaniesfromlendingmorethanonethirdoftheirtotalassets(includinglendingtheirsecurities),exceptthroughthepurchaseofdebtobligationsortheuseofrepurchaseagreements.Inaddition,collateralarrangementswithrespecttooptions,forwardcurrency,futurestransactions,andotherderivativeinstruments(asapplicable),aswellasdelaysinthesettlementofsecuritiestransactions,iftheFundwereevertousesuchderivativeinstruments,wouldnotbeconsideredloans.TheFundcurrentlydoesnotintendtomakeloans,exceptthatitmaylenditsAlibabaSharestogenerateincome(a)forworkingcapitalor(b)torepurchasetheFundsCommonStockifandtotheextentauthorizedbyitsBoardofDirectorsfromtimetotime.297/18/2015 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37/70TableofContentsBORROWINGSANDPREFERREDSTOCKBorrowingsTheFundintendstoenterintotheCreditFacilitypursuanttowhichtheFundmayborrowupto$[]million.TheFundanticipatesthatitwillinitiallyborrow$[]millionpursuanttotheCreditFacilityatoraboutthetimeofthecompletionoftheSpinOff.ThepurposeoftheinitialborrowingistoprovideworkingcapitalduringtheFundsfirstyearofoperations.TheFundcurrentlyintendstoborrowmoneyonlyforworkingcapitalandtorepurchaseitsCommonStockifandtotheextentauthorizedbyitsBoardofDirectorsfromtimetotime.TheFunddoesnotcurrentlyintendtousetheproceedsofanyborrowingtopurchaseadditionalinvestmentsecuritiesortopaydividendstostockholders,thoughitretainstherighttodoso.TheFundreservestherighttoborrowmoneytotheextentpermittedbythe1940Act.TheFundintendstoborrowmoneyforworkingcapitalandtorepurchaseitsCommonStockifandtotheextentauthorizedbyitsBoardofDirectorsfromtimetotime.TheFunddoesnotcurrentlyintendtoinvestborrowedmoneytoseektoincreasereturnstoitsinvestors.TheFundcurrentlyhasnointentiontoborrowmorethan$[](orapproximately[]percentofitstotalassetsimmediatelyaftertheSpinOff)duringitsfirstyearofoperations,althoughtheFundreservestherighttoborrowuptoonethir