7KH%RRNRI8QUHPLWWLQJ+RUURU

)RUHZRUG3OD\HUVLQKRUURUFDPSDLJQVDUHDOLWWOHWRRDFFXVWRPHGWRWKHQLJKWPDUHVWKHLUFKDUDFWHUVIDFHHYHQWKHPRVWHOGULWFKRIWHQWDFXODUKRUURUVLVOHVVLQWLPLGDWLQJZKHQ\RXNQRZH[DFWO\ZKDW LW LV EHFDXVH\RXU3&KDV IDFHG LW EHIRUHRQVRPHRWKHUHYHQLQJ1HZ WLPHVGHPDQGQHZQLJKWPDUHV2XUKRUURUVDUHQLJKWPDULVKO\LQWLPDWHRIWHQFUHDWHGIURPKXPDQYLFHRUOHWORRVHE\KXPDQJUHHG7KH\VKRZXVWKHXJOLQHVVWKDWXQGHUOLHVUHDOLW\7KH\DUHWKHFUDZOLQJWKLQJVXQGHUWKHURFNRIWKHHYHU\GD\VDQHZRUOG

7KLVERRNIROORZVRQIURPWKHUVWWZRUHOHDVHVIRUWKHQHZ*806+2(V\VWHP)HDU,WVHOIDQG7KH(VRWHUURULVWV,WUHTXLUHVRQHRUERWKRIWKHVHERRNV0RVWRIWKHPDWHULDOFDQEHXVHGZLWKHLWKHUERRN7KHERRNLVEDVHGRQFUHDWXUHVDQGPDWHULDOUVWSXEOLVKHGLQ7KH%RRNRI8QUHPLWWLQJ+RUURUFUHDWHGE\'DYH$OOVRSDQG$GULDQ%RWWDQG$GULDQKDVUHZULWWHQDQGXSGDWHGWKHPDWHULDOIRU*806+2(,WLQFOXGHVDFRPSOHWHO\QHZDGYHQWXUHIRU)HDU,WVHOIDQGDZKROHFKDSWHUIRUWKH(VRWHUURULVWVEDFNJURXQG

&UHGLWV3XEOLVKHU6LPRQ5RJHUV

/D\RXWDQG'HVLJQ-URPH+XJXHQLQ

$XWKRUV$GULDQ%RWWEDVHGRQWKHRULJLQDO%RRNRI8QUHPLWWLQJ+RUURUE\'DYH$OOVRSDQG$GULDQ%RWW

$UW'DYH$OOVRSH[FHSWSDJHV-URPH+XJXHQLQDQGSDJH*ULJRUL\.RO\DGLQ

$GGLWLRQDO0DWHULDO6DVKD%LOWRQ

&UHDWXUH&RQFHSWV'DYH$OOVRS

$GGLWLRQDO&UHDWXUHV$GULDQ%RWW%OHHGHU6NLWFKDQG6LPRQ5RJHUV0RWKHUORGHDQG6ROLORTX\

*806+2(OLQHVXSHUYLVRU5RELQ'/DZV

3URRIUHDGLQJ+DQV-UJ0H\HU

3OD\WHVWHUV%HQ&KDSPDQ&DPSEHOO)DLUZHDWKHU-RKQ0LOOHU:LOOLDPV1LN3UHVWRQ0LFKDHO7KRUQ&ODXV+DOOHQ9RONHU0DQWHO$QGUHDV5XHVVHO5RODQG%DKU7LPRWK\'DO\6KDZQ(UYLQ0DWW/DUVRQ%UDG4XLQQ$QG\:KHHOHU$ODQ6PLWKHH%ULDQ:RPDFKND

&RS\ULJKW3HOJUDQH3UHVV/WG6LPLODULWLHVEHWZHHQFKDUDFWHUVDQGSODFHVLQWKLVERRNDQGUHDOSHUVRQVDQGSODFHVDUHFRLQFLGHQWDO

3URGXFHGE\3HOJUDQH3UHVV/WG6SHFWUXP+RXVH/RQGRQ6:%18.

KWWSG\LQJHDUWKFRP

&RQWHQWV)RUHZRUG &UHGLWV &RQWHQWV

,QWURGXFWLRQ +RZ7R8VH7KLV%RRN 1HZ$ELOLWLHV 1HZ*806+2(5XOHV

%OHHGHU %ORRG&RUSVH %ORVVRPHU &ORRWLH 'HDWK7DSSHU 'HPHQWLD/DUYD 7KH7UDQVIRUPDWLRQRI-XOLD%URZQH 'UHDP7HDUHU 7KH'UHDPLQJ5HDOP 7KH&DXORI1LQJKL]LGGD /XFLG'UHDPLQJ 'URZQHU 6SLULWRI'DUN:DWHU (PSW\2QH )HUDO'URZQHU .RRN 0DQ,Q7KH%DU 0RWKHUORGH 7KH0\VWHU\0DQ 2UJDQ*ULQGHU -RUPXQJDQGU 7KH2XWVLGHUV 2YYDVKL 7KH3UDFWLFH :KR$UH7KH\" 0RUWLFLDQ 1XUVH

1XUVH 6XUJHRQ 6XUJHRQ 5HVLGXH'HPRQ 6FRXUJHU 6KDWWHUHU 6LVWHULWH )HDWXUHG3UROH0LFKHOOH 7KH+XQW*RHVRQ 6NLWFK 6OHHS+DJ 6QXII*ROHP 'LFWDSKRQHUHFRUGRI6SHFLDO$JHQW*DLO0RQFULHII

6QXII+RPXQFXOXV 6ROLORTX\ 6WUDS7KURDW 7RUWXUH'RJ

$UWLIDFWV 7KH)LUVW$OWDU 'RFWRU0R[RQV$SSDUDWXV 7KH&U\LQJ6WRQHV 7KH%RRNRI-DEDVVDOODE 'HPRQ)HWXV,Q$-DU 7KH6FDOSHORI0\QDUWKLWHS *XPP\5XEEHU%DOO 7LQFWXUHRI:RH 7KH6KDQNVNLQ 7RUXPERORV5RG %ODFN0HWDOOLF/LTXLG 6SDXOGLQJV%HOW 7KH9R\QLFK7DSH 7KH8JO\6RID /\VVD0DUWLQV)DFH

(VRWHUURULVPDQGWKH:RUOGRI8QUHPLWWLQJ+RUURU

6FHQDULR2XWOLQHV 7KH0DLGHQ,Q7KH0DUVK $QG,6KLYHU7KH:KROH1LJKW7KURXJK

7KH6HFUHW0\VWHULHV&OXE $QG7KH9DOOH\)RON%HORZ 7KH%ORJRI&ULVSLQ&ODUNH $QGUHDV%DE\ :KHQ7KH&DQQLEDOV&DPH7R6NXQNZDWHU

5HGLQ7RRWKDQG&ODZ 7XQHG7R$'HDG&KDQQHO &RPLQJ/LYH7R

4HOMAS0EPPER

3OUTH$UPONT!VENUE

-INNEAPOLIS

*ULY

$EAR-R#OSGROVE

)HAVESOMEINFORMATION)THINKMIGHTINTERESTYOU)HOPEYOUTHINKTHATSAGOODOPENINGLINEBECAUSE)VETHOUGHTABOUTITALOT(OWTOWRITEALETTERASKINGSOMEONE)VENEVERMETTOREADSOMETHINGTHEYWONTBELIEVE4HATLASTBITSNOTSOGOODISIT)USEDTOREADALOTOFlCTIONHORRORANDSTUFFLIKETHATANDINTHOSEBOOKSTHEPROTAGONISTOFTENSAYSh)CANTREMEMBERWHEN)lRSTREALIZEDvBUTTHISONEWONT"ECAUSEITSNOTlCTION)CANREMEMBER)OFTENWISH)COULDNTBUT)CAN!NDNOW)NEEDTOTELLSOMEONEELSEWHOCANREMEMBERORATLEASTMAKESURETHATTHEINFORMATIONISNTLOST)SUPPOSE)DBETTERBEGINATTHEBEGINNINGBECAUSEITSASTRANGESTORY)MALMOSTCERTAINYOUWONTBELIEVEIT)WOULDNTHAVEIF)HADNTSEENITnBUTIF)TELLYOUTHEWAYITSTARTEDYOUMIGHTBELIEVEITENOUGHTOKEEPREADING

)MANARTISTYOUSEE)REALLYCANTREMEMBERLEARNINGTODRAWTOSEETHINGSWITHMYEYESANDTOPUTTHEMONPAPERSOOTHERSCOULDSEETHEMTOO)NEVERWONDEREDWHAT)WOULDDOFORALIVINGJUSTHONEDMYSKILLSINCOLLEGEANDWALKEDSTRAIGHTINTOAJOBASATECHNICALILLUSTRATORFORAPUBLISHERPRODUCINGACADEMICTEXTBOOKS)SPENTMYDAYSINASMALLOFlCEDRAWINGWHATEVERWASPUTINFRONTOFMEBONESFOSSILS$ISSECTIONSEVENFORMEDICALTEXTS)SUPPOSETHESTUDENTSNEVERTHINKABOUTWHERETHEDRAWINGSCOMEFROMANDOTHERPEOPLEWOULDBEHORRIlEDIFTHEYTHOUGHTABOUTITTHENICECLEANBLACKANDWHITEASREDANDBLUEANDPURPLEANDTHESMELLBUT)LIKEDIT)WASCOMFORTABLEINMYOFlCEOROTHERPEOPLESLABSOBSERVINGTRANSLATINGCOLOR TEXTURE LIGHT AND SHADOW INTO SHADES OF BLACK ON WHITE -OST PEOPLE DONTOFTENSEEWHATSREALLYTHEREYOUKNOWORRATHERTHEYSEEITBUTTHEIRBRAINSEDITTHEINFORMATIONlLLINGINANYGAPSWITHWHATEXPERIENCEHASSHOWNTHEMINTHEPAST)THINKTHATIFTHEYSEESOMETHINGTRULYSTRANGECOMPLETELYBEYONDTHEIREXPERIENCETHEIRBRAINSEDITTHATTOOSUBSTITUTINGSOMETHINGTHATMAKESMORESENSEINTHEWORLDTHEYKNOW)MANARTISTATRAINEDILLUSTRATOR-YBRAINDOESNTDOTHAT)SEEWHATSREALLYTHERE

)TSTARTEDASALOVELYDAY)DBEENWORKINGmATOUTALLWEEKTOMAKEADEADLINEDRAWINGlSHALLSTARINGEYESANDSPINESANDmABBYGREYmESH)HADTOGOINON3ATURDAYTOINKTHELASTDRAWING"YTHETIME)DlNISHEDALL)COULDSMELLWASlSHANDFORMALINSO)DECIDEDTOWALKHOMETHELONGWAYTHROUGHTHEPARKTOGETSOMEFRESHAIROR)DHAVETOSKIPDINNER4HESUNWASSINKINGINTOTHELAKEANDFAMILIESWEREPACKINGUPTHEIRPICNICSTOGOHOMEWHEN)REACHEDTHEPARKPARENTSCLOSINGTHECOOLERSANDKIDSDRAGGINGTHEIRBASEBALLBATSBACKTOTHECARS)TWASWONDERFUL4HEGRASSWASGREENTHEPOPLARSWEREEVERYSHADEOFYELLOWGOLDANDBRONZEINTHELOWSUNANDTHESHARPSMELLOFTHEIRLEAVESmUSHEDTHEFORMALINOUTOFMYSINUSES)SLOWEDMYPACEAS)CAMETOTHEEDGEOFTHEPARKADMIRINGTHECOLORS!YOUNGCOUPLEWASWALKINGALONGTHEEDGEOFTHETREESHOLDINGHANDS(ESAIDSOMETHINGSHETURNEDANDKISSEDHIMLAUGHING!S)WATCHEDTWODOGSBOUNDEDUPLOOKEDLIKETHOSEBLACKONESLABSTHATSEEMTOLAUGHATPEOPLE4HEDOGSJUSTSTOODTAILSWAGGINGLOOKINGEXPECTANTANDAFTERAMOMENTTHEGUYSHRUGGEDPICKEDUPASTICKANDTHREWIT)TmEWTHROUGHTHEAIRBEHINDMEANDTHEDOGSBARKEDHAPPILYANDTOOKOFFAFTERIT4HEYRANPASTMEGRINNINGMOUTHSFULLOFTEETH,OTSOFTEETHGLEAMINGWHITEAGAINSTmOPPYPINKTONGUES4HECOUPLETURNEDANDWALKEDOFFHERHEADONHISSHOULDER4HEDOGSRANPASTTHESTICKAROUNDITANDBACKTOWARDSTHECOUPLEDISAPPEARINGINTOTHETREES/NEOFTHEMRANALITTLECLOSERTHISTIMEITSHEADSWIVELLINGUPTOLOOKATMEASITWENTPAST)TOOWALKEDAWAY-YLEGSKEPTMOVINGASMYBRAINWRESTLEDWITHWHATMYEYESHADSEENTEETHTOOMANYTEETH)CARRIEDONWALKINGLISTENINGTOTHEHIGHDISTANTSCREAMSOFTHEGULLSOVERTHE

LAKEWATCHINGMEMORYRATHERTHANTHECRACKSINTHESIDEWALK4HEIRLAUGHINGMOUTHSWERETOOBIGTHESHARPLYSERRATEDTEETHTOOBIGANDTHECLAWSONTHEIRHINDFEETHADLEFTGASHESINTHEGREENTURF4HATCOULDNTBERIGHT)DIDNTSEETHEM)MUSTHAVEIMAGINEDIT$OYOUUNDERSTANDWHAT)MTELLINGYOU$OYOU)DIDNTBELIEVEMYEYES)$ID.OT"ELIEVE-Y%YES)KEPTWALKINGALLTHEWAYHOME

/NTHENEWSTHATEVENINGTHEYREPORTEDAHORRIlCMURDER!YOUNGWOMANHADBEENRIPPEDTOPIECESBYAFRENZIEDATTACKERINTHELAKESIDETREES4HEREWERESHOTSOFBLUEmASHINGLIGHTSANDBLOODREDAGAINSTGOLDLEAVESBUTITWASALRIGHTTHEYDCAUGHTTHEMURDERER(ERBOYFRIENDHADNTLEFTTHESCENEWASFOUNDSEMICOMATOSE

DRUGGEDOUTOFHISMIND4HEYSHOWEDHIMBEINGBUNDLEDAWAYANDTHEREPORTERSTALKEDWISELYABOUTTHEEFFECTSOFILLEGALSUBSTANCES%XCEPTHETHEYDBEENlNEWHEN)SAWTHEMABOUTMINUTESBEFORESHEDIEDREDANDGOLDINTHESETTINGSUN

4HEPOLICECALLEDFORWITNESSES)TOLDTHEMABOUTTHEDOGSBUTTHEYDIDNTBELIEVEME4HEYKNEW)DBEENDRINKINGTHEYCOULDSMELLITONMYBREATH

)TOOK7EDNESDAYOFFWHENTHEPARKOPENEDAGAINWALKEDTHEREALLDAYANDSAWNOTHINGBUTTREESANDLEAVESANDGRASSANDSILENTGULLS)TWASCOLDERWHEN)WENTTHENEXT3ATURDAY)SATONABENCHFEEDINGTHEGULLSANDWATCHINGTHESHADOWSUNDERTHETREES)CAUGHTAGLIMPSEOFMOVEMENTSOMETHINGBLACKBUTITWASONLYAJOGGERRUNNINGTHEPATHS$IDSOMETHINGMOVEUNDERTHETREES)COULDNTBECERTAIN)DIDNTTRUSTMYEYESYOUSEE

4HATNIGHT)WENTINTOTOWNANDTRIEDTOGETDRUNKBUT)DRANKTOOMUCHANDWASSICKANDSPENTTHENIGHTWALKINGINSTEAD!NDWHILE)WASWALKINGTRYINGNOTTOTHINK)SAWSOMETHINGELSEANDTHISTIME)BELIEVEDMYEYESANDTHATISHOWITSTARTED

$IDYOUSEE"LADE)OFTENSEEHIMINMYDREAMSALLBLACKANDSILVERSTRIDINGTHROUGHTHENIGHTKILLINGTHEM"UT)VENEVERSEENIT)VENEVERSEENONEDIE$OYOUBELIEVEME!REYOUINTERESTED)HOPESO)MTIRED)MAFRAID!ND)MSOVERYTIREDOFBEINGAFRAIDOFWONDERINGWHEN)LLMAKETHEMISTAKETHATKILLSME4HEYRECUNNINGTHEYREVERYGOODATWHATTHEYDOAND)MIGHTHAVEMISSEDONENOTSEENIT2EADTHElLES)VESENT4HEREAREOTHERCOPIES)VESENTTHEMTOOTHERPEOPLE)THOUGHT)HOPEDMIGHTBEINTERESTEDBUT9/5MIGHTBETHEONLYPERSONWHOSEESREALITYINSTEADOFSOMETHINGYOURBRAINTHINKSMAKESMORESENSE4HEREMUSTBESOMEONEELSEWHOWILLBELIEVETHEIREYES

9OURSMOSTSINCERELY

03)TSINTERESTEDMEFORYEARSTHEDIFFERENCEBETWEENTHEPENANDINKONPAPERANDTHEBONEONTHETABLETHEWORDSONTHEPAGESANDTHEIDEASTHEWORDSCONVEY2EALITYANDWHATWEPERCEIVEITTOBE4HERESAlNELYHONEDDISTINCTIONBETWEENPERCEPTIONANDMADNESSITSARAZORSEDGE)VEBEENWALKINGFORYEARSAND)MBLEEDING

&ORAWHILE)WONDEREDIF)WASGOINGMADSO)WATCHEDTHEMADANDTHEDRUNKS4HEYCRINGEANDWEEPATTHINGSDRAWNFROMTHEIRPASTTHATEXISTONLYINTHEIRMINDS(ARVEYLEFTNOPILESOFDUNGNOFOOTPRINTSINTHEGRASS4HETHINGS)SEELEAVEBLOODYCORPSESRIPPEDLIMBFROMLIMBTHESTENCHOFDEADMEATSEEPINGOUTBENEATHALOCKEDDOORFRAGMENTSOFLIVESLIKEPIECESOFAJIGSAWTOBEASSEMBLEDFROMREPORTSINTHEPRESS4HEYAREREALFARMOREREALNOWTHANTHEPEOPLETHEYVEDESTROYED0LEASEBELIEVEME

,QWURGXFWLRQ

+RZ7R8VH7KLV%RRN

7KH *806+2( HGLWLRQ RI WKH %RRN RI 8QUHPLWWLQJ+RUURU SUHVHQWV WKH FUHDWXUHV IURP WKH LQLWLDO 2*/HGLWLRQVSHFLDOO\UHYLVHGDQGGHWDLOHGIRUXVHZLWK)HDU,WVHOIDQG7KH(VRWHUURULVWVDORQJZLWKFRPSOHWHO\QHZPDWHULDOLQWKHIRUPRIYHQHZHQWLWLHV%OHHGHU6NLWFK(PSW\2QH0RWKHUORGHDQG6ROLORTX\

:HYH DOVR SURYLGHG WHQ VXPPDUL]HG 6LQLVWHU 3ORWVIRU WKH*0VXVH LQDQ(VRWHUURULVWVJDPHDORQJZLWKLQIRUPDWLRQ RQ KRZ WKH FUHDWXUHV RI 8QUHPLWWLQJ+RUURUDUHXVHGLQWKH(VRWHUURULVWFDPSDLJQIRUJOREDOUHDOLW\ EUHDNGRZQ 7KLV VHFWLRQ LQFOXGHV LPSRUWDQWGLVWLQFWLRQVEHWZHHQWKH:RUOGRI8QUHPLWWLQJ+RUURUDQGWKH(VRWHUURULVWVFDPSDLJQVHWWLQJ

)LQDOO\ ZH FORVH ZLWK DQ H[SDQGHG YHUVLRQ RI WKHVFHQDULR 7KH )LQDO &DVH DQG WKH QHZ VFHQDULR &URRNV(QGERWKGHVLJQHGIRUXVHZLWK)HDU,WVHOI

1HZ$ELOLWLHV7KH %RRN RI 8QUHPLWWLQJ +RUURU *806+2( (GLWLRQLQWURGXFHV WZRQHZDELOLWLHVRQH IRU3&VDQGRQH IRUWKHLUJKDVWO\DQWDJRQLVWV

$EHUUDQFH*HQHUDO&UHDWXUHVRI8QUHPLWWLQJ+RUURURQO\6RPH FUHDWXUHV LQ WKLV ERRN W\SLFDOO\ WKH RQHV WKDWKDLO IURP WKH2XWHU %ODFN KDYH$EHUUDQFH SRROV $FUHDWXUHV$EHUUDQFH DELOLW\ UHSUHVHQWV WKH GHJUHH RILQWULQVLFSRZHULWKDVWRVKUHGWKH0HPEUDQHSURWHFWLQJRXU ZRUOG DQG LPSRVH VXEMHFWLYLW\ XSRQ REMHFWLYLW\$EHUUDQFHLVVLPLODUWRWKHKXPDQIDFXOW\RIZLOOSRZHUEXWLVPRUHDOLHQDQGRIWHQPDOHYROHQW

$EHUUDQFHLVDFDWFKDOODELOLW\WKDWHDFKRIWKHKRUURUVXVHV LQ LWV RZQZD\ )RU H[DPSOH D FUHDWXUHPLJKWGUDZXSRQ$EHUUDQFH WR FUHDWH D VXSHUQDWXUDO HIIHFWWR DOWHU D SHUVRQV SHUFHSWLRQV RU WR WUDYHO EHWZHHQUHDOLWLHVGHSHQGLQJXSRQZKDW WKDW FUHDWXUHV VSHFLDODELOLWLHVDUH

7KH KLJKHU DQ HQWLW\V $EHUUDQFH UDWLQJ WKH PRUHSRWHQWLDOLWKDVWRGLVUXSWFRQYHQWLRQDOUHDOLW\$EHLQJVXFKDVWKH0\VWHU\0DQLVDYRUWH[RISXUH$EHUUDQFH

,WIROORZVWKDWWKHKLJKHUDFUHDWXUHV $EHUUDQFH UDWLQJLV WKH NHHQHU WKH(VRWHUURULVWV DUH WR EULQJLW LQWR WKHZRUOG 3V\FKLFVFDQVHQVHVWURQJVRXUFHV RI$EHUUDQFH ZKLFK LQ WKH FDVH RI8QUHPLWWLQJ+RUURUV DSSHDU DV EODFN FORWV RIQLJKWPDUHKRZOLQJZLWKDWKRXVDQGYRLFHV

$EHUUDQFHPD\EHUHIUHVKHGE\WKHXVXDOUXOHVUHJDUGLQJFUHDWXUHSRROVVHHEHORZ6RPHFUHDWXUHVKDYHRWKHUZD\VWRUHIUHVK$EHUUDQFHGXULQJDQHQFRXQWHUZKLFKLQYROYH GHOLQJ RU GHIRUPLQJ WKHPXQGDQHZRUOG LQVRPHZD\ 7KHVHPHWKRGVDUH H[SODLQHG LQ WKH UXOHVWH[WIRUWKHFUHDWXUH

$FUHDWXUHZLWKDQ$EHUUDQFHUDWLQJLVXVXDOO\DFWLYHO\LQLPLFDOWRKXPDQLW\WKH2XWVLGHUVDUHWKHRQO\NQRZQH[FHSWLRQ&UHDWXUHVZLWKQR$EHUUDQFHUDWLQJVXFKDV%ORRG&RUSVHVVLPSO\IROORZWKHLURZQOLPLWHGDJHQGDDQGRQO\FRQWULEXWHWRWKH(VRWHUURULVWVJUDQGFDPSDLJQE\ LQFUHDVLQJ WKH OHYHO RI FKDRV XQSUHGLFWDELOLW\ DQGIHDULQWKHZRUOG

7KH2UGR9HULWDWLVKDVQRW\HWHVWDEOLVKHGH[DFWO\KRZ$EHUUDQFH ZRUNV EXW LWV REVHUYDWLRQV KDYH OHG LW WRFRQFOXGH WKDW WKH VXSHUQDWXUDOKRUURUV VXPPRQHGE\WKH(VRWHUURULVWVGRKDYHD OLPLW WR WKHLUSRZHU 7KLVLQIRUPDWLRQKDVWDFWLFDOYDOXHLWPHDQVWKDWWKH\FDQEHH[KDXVWHG%LWWHUH[SHULHQFHKDVVKRZQWKDWZKHQRQHRI WKHKRUURUV UHWUHDWV LW LVQRWXVXDOO\EHFDXVH LWKDVVXIIHUHG KDUP 7KHVH HQWLWLHV RQO\ZLWKGUDZ VR WKDWWKH\FDQUHWXUQDJDLQUHSOHQLVKHG

3DWKRORJ\,QYHVWLJDWLYH$FDGHPLF

LGHQWLI\PHGLFDODEQRUPDOLWLHV

,I \RX KDYH HLJKW RUPRUH SRLQWV LQ0HGLF\RXJHW3DWKRORJ\IRUIUHH

1HZ*806+2(5XOHV

$ELOLW\3RRO5HIUHVKLQJ&UHDWXUHV

,QDFFRUGDQFHZLWK*806+2(VQDUUDWLYHEDVHGVW\OHFUHDWXUHV UHIUHVKDELOLW\SRROSRLQWVDFFRUGLQJ WRKRZRIWHQWKH\DSSHDU $FUHDWXUHWKDW LVQRWHQFRXQWHUHGIRU KRXUV RU PRUH PD\ UHSOHQLVK DOO RI LWV DELOLW\SRROVZLWKWKHH[FHSWLRQRI+HDOWKZKLFKLVUHFRYHUHGDWWKHUDWHRIGSRLQWVSHUGD\

,IWKH3&VHQFRXQWHUDFUHDWXUHODWHURQLQWKHVDPHGD\VXFKDVE\WUDFNLQJLWWRLWVODLULWFDQUHIUHVKDOORILWVDELOLW\ SRROV WR DPD[LPXP RI KDOI WKHLU WRWDO 5DWLQJDJDLQ ZLWK WKH H[FHSWLRQ RI+HDOWK ZKLFK LW FDQQRWUHIUHVKDWDOO

&UHDWXUHVWKDWKDYHVSHFLDOUXOHVIRUUHFRYHULQJ+HDOWKVXFKDVUHJHQHUDWLQJFUHDWXUHV IROORZWKHLURZQUXOHVUDWKHUWKDQWKRVHJLYHQDERYH

$OFRKRO'UXJVDQG6WDELOLW\/RVV

,W LV SRVVLEOH WR DFKLHYH VRPH PHDVXUH RI LQVXODWLRQDJDLQVWKRUULEOHHYHQWVE\JHWWLQJGUXQNRQDOFRKRORUKLJKRQGUXJV7KLVLVQWDVHQVLEOHFKRLFHLQWKHUHJXODUFRXUVHRIDQLQYHVWLJDWLRQEXWFKDUDFWHUVSXVKHGWRWKHYHU\OLPLWRIHQGXUDQFHZLOO IUHTXHQWO\WXUQWR'XWFKFRXUDJHWRKHOSJHWWKHPWKURXJK

%HFRPLQJ PRGHUDWHO\ GUXQN RU KLJK LQFUHDVHV WKHWDUJHW 'LIFXOW\ RI DOO WHVWV E\ EXW JUDQWV WKHFKDUDFWHUIRXUSRLQWVRIWHPSRUDU\6WDELOLW\7KHVHFDQEHH[SHQGHGRQ6WDELOLW\ WHVWVDVXVXDO WKXVSRVVLEO\DOORZLQJ FKDUDFWHUV WRPDNH VXFFHVVIXO6WDELOLW\ WHVWVZKHQ FRQIURQWHGZLWKKRUURU +RZHYHU DQ\XQXVHGSRLQWV DUH ORVW DJDLQ ZKHQ WKH FKDUDFWHU VREHUV XS7HPSRUDU\ 6WDELOLW\ SRRO SRLQWV JDLQHG WKURXJKDOFRKRO RU GUXJV GR QRW FDQFHO WKH HIIHFWV RI EHLQJVKDNHQRUKDYLQJDPHQWDOLOOQHVV

%HFRPLQJURDULQJGUXQNRUVN\KLJKLQFUHDVHVWKH

WDUJHW'LIFXOW\RIDOOWHVWVE\DQGJUDQWVDFKDUDFWHUVL[ SRLQWV RI WHPSRUDU\ 6WDELOLW\ ZKLFK IXQFWLRQ DVDERYH

1RWH WKDW RQO\ GHSUHVVDQW QDUFRWLFV KDYH WKLV HIIHFW6WLPXODQWV DQG KDOOXFLQRJHQV VXFK DV /6' DUH PRUHOLNHO\WRLQFUHDVHWKH'LIFXOW\RI6WDELOLW\WHVWV

$OHUWQHVV0RGLHU

6RPHFUHDWXUHVKDYHNHHQHUVHQVHV WKDQRWKHUV 7KH\PD\KDYHKHLJKWHQHGVHQVHVRIVPHOORUSV\FKLFDELOLWLHVWKDWWHOOWKHPZKRLVQHDUE\$OWHUQDWLYHO\WKH\PD\EHGHQVHEUXWLVKRUHYHQODFNLQJLQSULPDU\VHQVHV

7KLVYDULDWLRQLVUHSUHVHQWHGE\WKHFUHDWXUHV$OHUWQHVV0RGLHU,WLVDGGHGWRRUVXEWUDFWHGIURPWKHWDUJHWGLIFXOW\RI,QOWUDWLRQWHVWVPDGHZKHQWKHFUHDWXUHVVHQVRU\ DZDUHQHVV ZRXOG EH D IDFWRU VXFK DV ZKHQWKHSOD\HUVDUHWU\LQJWRVQHDNXSRQDFUHDWXUHRUDUHPRYLQJDURXQGQHDULWVODLU

1RWH WKDW FUHDWXUHV GR QRW KDYH WKH 6HQVH 7URXEOHRU6XUYHLOODQFH DELOLWLHV 3OD\HUVPDNH UROOV WR HYDGHFUHDWXUHVFUHDWXUHVGRQRWPDNHUROOVWRGHWHFWSOD\HUV

%RZHO5DNH

6RPH FUHDWXUHV FDQ XVH WKHLU QDWXUDO ZHDSRQU\ RUREMHFWV VXFK DV EXWFKHUV KRRNV WR ULS WKHLU YLFWLPVRSHQ $ FUHDWXUH ZLWK WKLV DELOLW\ FDQ VSHQG WZRSRLQWVRI6FXILQJEHIRUHDQDWWDFNLVPDGHWRGHDOWZRDGGLWLRQDO SRLQWV RI+HDOWK GDPDJH LQ WKH HYHQW RI DVXFFHVVIXOKLW

&KLOO*UDVS

&UHDWXUHVZLWKWKLVDELOLW\FDQLQGXFHH[KDXVWLRQZLWKDWRXFKGUDLQLQJWKHERG\KHDWDQGYLWDOHQHUJ\IURPWKHWDUJHW7KHFUHDWXUHFDQVSHQGWKUHHSRLQWVRI6FXILQJWRPDNHD&KLOO*UDVSDWWDFNDVLWVDWWDFNIRUWKHURXQG7KHVHSRLQWVDUHQRWDGGHGWRWKHDWWDFNUROO,ILWKLWVLW GUDLQV DQ DGGLWLRQDO G SRLQWV IURP WKH YLFWLPV$WKOHWLFV SRRO DV ZHOO DV GHDOLQJ+HDOWK GDPDJH DVXVXDO ,I WKH YLFWLPV $WKOHWLFV SRRO LV HPSW\ DQ\IXUWKHUSRLQWVDUHWDNHQIURPKLV6FXILQJSRROLIWKLV

WRRLVHPSW\WKHQWKHDGGLWLRQDOSRLQWVDUHWDNHQIURPKLV+HDOWK

'URZQLQJ

&KDUDFWHUVSOXQJHG LQWRZDWHU RURWKHUXQEUHDWKDEOHHQYLURQPHQWV VXFKDV VPRNHRUSRLVRQRXVJDVDUHDWULVNRIGURZQLQJ

,I D FKDUDFWHU KDV DGYDQFH ZDUQLQJ EHIRUH EHLQJLPPHUVHGKHFDQKROGKLVEUHDWK$FKDUDFWHUKROGLQJKLVEUHDWKXQGHUZDWHUPD\PDNHDQ$WKOHWLFVWHVWHDFKURXQGWRDYRLGLQKDOLQJZDWHULQDGGLWLRQWRDQ\WKLQJHOVH KH PD\ EH GRLQJ VXFK DV WU\LQJ IUDQWLFDOO\ WRHVFDSHIURPDFUHDWXUHVJUDVS 7KH'LIFXOW\RIWKLVWHVWEHJLQVDWDQGLQFUHDVHVE\ZLWKHYHU\SDVVLQJURXQG $V VRRQDV WKH FKDUDFWHU IDLOV WKH WHVW KHKDVLQKDOHGZDWHUDQGEHJLQVWRGURZQ

'URZQLQJFKDUDFWHUVDXWRPDWLFDOO\ORVHGSRLQWVRI+HDOWKSHUURXQGEXWWKHVHORVWSRLQWVFDQEHUHVWRUHGLIWKHYLFWLPLVUHVFXHGDQGUHVXVFLWDWHGEHIRUHKHRUVKHGLHV

*UDSSOLQJ

$ FUHDWXUH ZLWKLQ VFXILQJ UDQJH PD\ XVH LWV DFWLRQWRPDNHDQ6FXILQJFRQWHVWRSSRVHGE\WKHYLFWLPV$WKOHWLFV )OHHLQJ RU 6FXILQJ WDUJHWV FKRLFH DQGJUDVSKROGRILWVWDUJHW,IWKHFUHDWXUHZLQVWKHFRQWHVWLW GHDOV QR GDPDJH EXW KDV FDXJKW WKH YLFWLP DQG LVKROGLQJKLPIDVWDQGFRQWLQXHVWRGRVRIRUDVORQJDVLWVJULSODVWV7KHHIIHFWVRIWKLVJULSYDU\GHSHQGLQJRQZKDW LVGRLQJLW 7\SLFDOO\ WKHHIIHFWVRIDJULSVXFKDV6WUDS7KURDWVVWUDQJXODWLRQGRQRWEHJLQXQWLOWKHFUHDWXUHV QH[W DFWLRQ VR WKH YLFWLP KDV D FKDQFH WREUHDNIUHH

,I D FKDUDFWHU EHJLQV KLV DFWLRQ JUDSSOLQJ D WDUJHW KHPD\ DWWDFN WKDW WDUJHWZLWK6FXILQJ WKH WDUJHWV KLWWKUHVKROG LV ORZHUHG E\ LQ WKDW HYHQW +RZHYHUWKHJUDSSOHUVKLWWKUHVKROGLVDOVRORZHUHGE\LIWKHSHUVRQKHLVJUDSSOLQJDWWHPSWVWRDWWDFNKLP

7KHJUDSSOHGYLFWLPPD\XVHKLVDFWLRQ WRDWWHPSW WRIUHH KLPVHOI IURP WKH DVVDLODQWV JUDVS E\ EHDWLQJ WKHDVVDLODQW LQ DQ$WKOHWLFV)OHHLQJ RU6FXILQJ FRQWHVWYLFWLPVFKRLFH

+HDOWK/RVVDQG'HDWKIRU13&V

8QOLNH3&VPRQVWHUVDQGRWKHU13&VFDQQRWFRQWLQXHWRIXQFWLRQZKHQEHORZ]HUR+HDOWK,IWKHLU+HDOWKLVUHGXFHGWR]HURRUEHORZWKH\VLPSO\GLH ([FHSWLRQVWRWKLVUXOHDUHJLYHQLQWKHFUHDWXUHVJDPHWH[W

7KH*0LVKRZHYHUDW OLEHUW\WRXVHWKHUXOHVIRU3&LQMXU\DQGGHDWKIRUFHUWDLQLPSRUWDQWKXPDQ13&VLIWKLVZRXOGDGGWRWKHGUDPDRIDJLYHQVFHQH

,QYHVWLJDWLYH $ELOLW\ 5DWLQJV $V 'LIFXOW\0RGLHUV7KH *0 ZLOO RFFDVLRQDOO\ HQFRXQWHU VLWXDWLRQV LQZKLFK D FKDUDFWHU QHHGV WR XVH D *HQHUDO $ELOLW\ WRDFFRPSOLVKDGLIFXOWWDVNLQVXFKDZD\WKDWRQHRIKHU,QYHVWLJDWLYH$ELOLWLHV LVREYLRXVO\ UHOHYDQW WR LW 7KHTXHVWLRQWRDVNLV:RXOGWKLVFKDUDFWHUVUDWLQJLQWKH,QYHVWLJDWLYH$ELOLW\JLYHKHUDQDGYDQWDJHLQWDFNOLQJWKLVFKDOOHQJHWKDWDQRWKHUSHUVRQZRXOGQRWKDYH"

,Q WKHVH FDVHV WKH UDWLQJ QRW WKH FXUUHQW SRRO RI WKH,QYHVWLJDWLYH $ELOLW\ VKRXOG EH GHGXFWHG IURP WKHWDUJHW'LIFXOW\RIWKHWHVWLQTXHVWLRQ

)RU H[DPSOH D FKDUDFWHUZKR LV WU\LQJGHVSHUDWHO\ WRFUDFNWKHHQFU\SWHGVHFXULW\FRGHRQDORFNHGEXONKHDGGRRU VR DV WR HVFDSH EHIRUH WKH URRP RRGV PLJKWUROO ,QOWUDWLRQ DJDLQVW D WDUJHW 'LIFXOW\ RI PLQXVKHU &U\SWRJUDSK\ UDWLQJ EHFDXVH KHU NQRZOHGJHRI &U\SWRJUDSK\ LV GLUHFWO\ UHOHYDQW WR WKH GUDPDWLFDWWHPSW WR FUDFN WKH FRGH 6LPLODUO\D FKDUDFWHUZKRLVUDFLQJDJDLQVWWLPHWRFOHDUDMDPPHGULHEHIRUHWKHEORRGFRUSVHVJUDEKHUPLJKWUROO0HFKDQLFVDJDLQVWDWDUJHW'LIFXOW\RIPLQXVKHU%DOOLVWLFVUDWLQJ

0XOWLSOH$WWDFNV

6RPHFUHDWXUHVKDYHPXOWLSOHDWWDFNVRIWKHVDPHW\SHOLVWHG )RUH[DPSOH WKH7RUWXUH'RJVKDYH'ULOO DQG0DQGLEOHVZKLFKDUHERWK6FXILQJDWWDFNV

$ FUHDWXUHZLWKPXOWLSOHPHOHH DWWDFNVPD\ DWWDFNWZLFH RQ LWV WXUQ EXW LW PD\ QRW H[SHQG PRUH

LQWURGXFWLRQ

6FXILQJ SRLQWV RQ LWVVHFRQG DWWDFN WKDQ KDOIWKH DPRXQW LW VSHQW RQ LWV

UVW DWWDFN )RU H[DPSOH D 7RUWXUH 'RJFRXOG VSHQG SRLQWV RI 6FXILQJ RQ LWVPDQGLEOHDWWDFN LWFRXOGWKHQDWWDFNZLWKLWV

GULOOEXWFRXOGQRWH[SHQGPRUHWKDQ6FXILQJSRLQWVRQLWVGULOODWWDFN

&UHDWXUHVVRPHWLPHVKDYHVHSDUDWHZHDSRQVOLVWHGIRU6KRRWLQJ DQG 6FXILQJ 8QOHVV WKH WH[W VSHFLFDOO\VWDWHVRWKHUZLVH WKH\PD\RQO\XVH WKHLU6KRRWLQJRUWKHLU6FXILQJZHDSRQVLQDJLYHQURXQG(YHQKDYLQJPXOWLSOH DWWDFNV GRHV QRW DOORZ D PRQVWHU WR XVH LWV6KRRWLQJDQG6FXILQJZHDSRQVRQWKHVDPHWXUQ

5HQG$UPRU

$ FUHDWXUH ZLWK WKLV DELOLW\ FDQ GHVWUR\ LWV WDUJHWVDUPRU ,W GRHV WKLV DIWHU D KLW LV ODQGHG DQGGDPDJHUROOHG ,WPD\ VDFULFH RQH SRLQW RI GDPDJHGHDOW LQRUGHUWRUHPRYHRQHSRLQWRIDUPRUSURWHFWLRQIURPWKHWDUJHW$UPRUZLWKQRSURWHFWLRQOHIWLVGHVWUR\HG

6SLULW*RXJH

6RPH FUHDWXUHV HVSHFLDOO\ WKRVH RI D JKRVWO\ RULQFRUSRUHDO VRUWKDYH WKHDELOLW\ WR DVVDXOW WKH WDUJHWVOLIHIRUFHGLUHFWO\7KH\LQLFWQR+HDOWKGDPDJHZKHQWKH\ DWWDFN EXW HYHU\ KLW VKUHGV WKH WDUJHWV SV\FKHGHDOLQJ GDPDJH WR 6WDELOLW\ H[DFWO\ DV LI LW KDG EHHQ+HDOWK 6RPH FUHDWXUHV FDQ DOVR UHFRYHU+HDOWK LQ DYDPSLULFPDQQHUE\ WKHVHDWWDFNV W\SLFDOO\ UHFRYHULQJRQH ORVW SRLQW RI+HDOWK IRU HYHU\ SRLQW RI 6WDELOLW\GDPDJHGHDOW

6WDELOLW\ORVWWRD6SLULW*RXJHDWWDFNFDQQRWEHUHFRYHUHGZLWK WKH6KULQN DELOLW\ ,W FDQ KRZHYHU EH UHJDLQHGQDWXUDOO\RYHUWLPHE\UHFRXUVHWRVRXUFHVRIVWDELOLW\VHHWKH6WDELOLW\UXOHVLQ(VRWHUURULVWVDQG)HDU,WVHOIVRORQJDVWKHYLFWLPKDVDFFHVVWRKLVVRXUFHVRIVWDELOLW\

&KDUDFWHUV ZKR GURS EHORZ ]HUR6WDELOLW\ IURP WKHVHDWWDFNV ODSVH LQWR D GHHS DQG SHUPDQHQW FRPD DVGHVFULEHGDERYH7KH\FDQQRWEHURXVHGIURPWKLVFRPDE\DQ\QRUPDOPHDQV,QJDPHWHUPVWKHFKDUDFWHULVDVORVWDVLIKHKDGJRQHSHUPDQHQWO\LQVDQH

6WHDOWK0RGLHU

&UHDWXUHV KDYH YDU\LQJ OHYHOV RI VWHDOWK 6RPH DUHHVSHFLDOO\ TXLHW VRPH DUH VPDOO HQRXJK WR VQHDNDURXQGXQVHHQ VRPHDUHKXJHDQGFXPEHUVRPHDQGVRPH VWLQN VR SRZHUIXOO\ WKDW WKH\ FDQQRW KRSH WRHYDGHGHWHFWLRQ

7R UHSUHVHQW WKLV ZKHQ D FUHDWXUHV SURFLHQF\ ZLWKVWHDOWK LV VLJQLFDQWO\GLIIHUHQW IURPWKDWRIDKXPDQD VWHDOWK PRGLHU LV JLYHQ 7KLV PRGLHU LV DGGHGWR RU VXEWUDFWHG IURP WKH 'LIFXOW\ QXPEHU RI DQ\DSSURSULDWH6HQVH7URXEOHRU6XUYHLOODQFHWHVWVPDGHWRQRWLFHWKHFUHDWXUH

1RWH WKDW FUHDWXUHV DQG RWKHU13&V GR QRW KDYH WKH,QOWUDWLRQ DELOLW\ 7KH\ QHYHU PDNH UROOV WR DYRLGGHWHFWLRQSOD\HUVDOZD\VPDNHUROOVWRGHWHFWWKHP

%/(('(5

$ODFHUDWHGXQGHDGVKDGHSDOHDVGHDWKDQGWLHGDOORYHUZLWKEDQGDJHVWRNHHSLWVZRXQGVFORVHGWKH%OHHGHULVLQIDFWEHQLJQLQLWVRZQWZLVWHGZD\,WKDVDORQJIDFHOOHGZLWKPHODQFKRO\DQGGDUNZDWHU\H\HV,WVHHNVWRIUHHKXPDQLW\IURPVRUURZE\XVLQJDQROGIDVKLRQHGWHFKQLTXH WKDWRIEORRGOHWWLQJ 8QIRUWXQDWHO\ LWRIWHQOHDYHV LWV SURWpJpVZHOO VFKRROHG LQ WKH WHFKQLTXHV RIVHOIKDUPDQGXQDEOHWRFRSHZLWKRXWWKLVUHOHDVH

1RERG\NQRZVZKHUH WKH%OHHGHUV FDPH IURP 6RPHKROGWKDWWKH\DUHGLVWDQWO\UHODWHGWRWKH3UDFWLFHDQGIRUPDPRUHEHQHYROHQWEUDQFKWKHUHRI2WKHUVEHOLHYHWKH\KDYHDUHOLJLRXVUDWKHUWKDQDPHGLFDOEDFNJURXQGRQH VWXGHQW KDV SRLQWHG RXW WKH VLPLODULWLHV EHWZHHQWKHEOHHGHUVDQGWKHHDUO\PHGLDHYDO&DODSHFKL6HFWRI3UDJXHZKRJDYHWKHPVHOYHVYROXQWDU\VWLJPDWDXVLQJVKDUSLPSOHPHQWVLQRUGHUWRFRPHFORVHUWR*RGDQGFRQVLGHUHGWKHVKHGEORRGWREHKRO\VRPHWLPHVXVLQJLWWREDSWL]HQHZVXSSOLFDQWVRUWRKHDOWKHVLFN

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

7KHEOHHGHUVPHWKRGVDUHVXUSULVLQJO\HIIHFWLYH7KRVHZKRWKHEODGHFXWVUHSRUW IHHOLQJYHU\ OLWWOHSDLQRQO\DPLOGEXUQLQJVWLQJ OLNHDNLWWHQ VFUDWFK IROORZHGE\ZDYHVRIJRUJHRXVUHOLHIDVDOOWKHPHQWDOSUHVVXUHWKDWZDVSLOLQJXSRQWRSRI WKHPEOHHGVRXWRI WKHLUERG\GURSE\GURS 2QHDQDORJ\FURSVXSDJDLQDQGDJDLQLQWKHFDVHQRWHVWKHEOHHGLQJLVOLNHZHHSLQJDIWHU\RXKDYHEHHQXQDEOHWRFU\IRU\HDUV,WJHWVDOOWKHSDLQDQGJULHIRXWRI\RXUV\VWHP

,URQLFDOO\ WKLVJULVO\ IRUPRI UHOLHI IURPVWUHVV LV LWVHOIDGGLFWLYH DQG FDXVHV PRUH VWUHVV LI LW LV QRW UHFHLYHGUHJXODUO\ 7KRVHZKR DUH FDOPHG E\ WKH EODGHV FXWVEHJLQ WR FUDYH WKHP ,I WKH EOHHGHU KDV PRYHG RQ WRD GLIIHUHQW VXEMHFW WKH\ DOPRVW DOZD\V VWDUW WR FXWWKHPVHOYHV VSRQWDQHRXVO\ LQ LPLWDWLRQ RI WKH KHDOLQJZRXQGV WKH\ UHFHLYHG 7KH JDVKHV RI UD]RUV DUH D

SRRU VXEVWLWXWH IRU WKH EOHHGHUV JHQWOH EODGHV EXWPDQ\\RXQJSHRSOHFKRRVHWKHFXWVDVDQDOWHUQDWLYHWRVXIIHULQJKHHGOHVVRIWKHGDQJHUVRIEORRGSRLVRQLQJRUH[FHVVLYHEORRGORVV7KHVHOILQLFWHGZRXQGVVWLOORIIHUVRPHUHOLHIEXWLWLVQHYHUHQRXJK

,W LVVPDOOVXUSULVH WKHQWKDWVRPHRIWKRVHZKRKDYHEHHQ EOHVVHG E\ WKH EOHHGHUV DQG WKHQ DEDQGRQHGHYHQWXDOO\ FKRRVH WR HVFDSH OLIH LWVHOI ZLWK DOO LWVDWWHQGDQWSDLQVE\PDNLQJRQHRU WZRGHHSDQGQDOFXWV 7KLVWHQGHQF\IRUWKHEOHHGHUVYLVLWVWRHQGLQDVXLFLGHKDVPRWLYDWHGPRVW RI WKHPRUHEHQLJQRFFXOWRUJDQL]DWLRQV VXFK DV WKH2UGR9HULWDWLV WR FRQVLGHUWKHPDPHQDFH(YHQLIWKHLUYDJXHLQWHQWLRQLVWRUHOLHYHVXIIHULQJWKHYLFWLPLVQROHVVGHDGDWWKHHQGRILW

7KHPRVW VXVSLFLRXV RI FRPPHQWDWRUV KDYH VXJJHVWHGWKDWWKHHYHQWXDOVXLFLGHLVWKHUHDOREMHFWRIWKHEOHHGHUVYLVLWDWLRQVWKHSKLORVRSK\EHLQJWRHQGVRUURZRQ(DUWKE\JRDGLQJRQHSHUVRQDIWHU DQRWKHU LQWR VHOIPXUGHU7KLV PD\ EH WUXH EXW LW FRQWUDVWV VWURQJO\ ZLWK WKHEOHHGHUVJHQWOHGHPHDQRUDQGDSSDUHQWHPSDWK\ZLWKWKHPRVWYXOQHUDEOH

3ROLFH LQYHVWLJDWRUV IUHTXHQWO\ PLVWDNH WKH ZRUN RIEOHHGHUV IRU VODVKHU FULPHVZKLOHPRUHRFFXOWPLQGHGSHUVRQV ZLOO RIWHQ MXPS WR WKH FRPSOHWHO\ HUURQHRXVFRQFOXVLRQ WKDW WKH %OHHGHU LV VRPH VRUW RI YDPSLUH SUREDEO\ QRW D JHQXLQH QRVIHUDWX EXW VRPHPDQLDFZKR KDV FRQYLQFHG KLPVHOI WKDW KH QHHGV EORRG WRVXUYLYHDQGJDVKHVKLVYLFWLPVZLWKDUD]RUWRJHWLWLQWKHPDQQHURI5RPHURV0DUWLQ

6RFLDO ZRUNHUV RSW IRU WKH PRUH SURVDLF DQG REYLRXVFRQFOXVLRQ QDPHO\ WKDW WKH YLFWLP KDV LQLFWHG WKHZRXQGVKHUVHOIDQGLVRQHRIWKHPDQ\VHOIKDUPHUVZKRXVH EORRGOHWWLQJ DV D FRSLQJPHFKDQLVP 7KRVHZKRKDYH OHDUQW WR VHOIKDUP IURP WKH EOHHGHUV VRPHWLPHVFRPHLQWRFRQWDFWZLWKVXSSRUWJURXSVRIWHQLQWKHKRSHRIQGLQJWKHLUSDWURQEOHHGHUDJDLQDQGDUHGLVPD\HGZKHQWKHRWKHUPHPEHUVNQRZQRWKLQJRIWKHVSHFWHUVDQGULGLFXOHWKHPIRUWDONLQJVXFKQRQVHQVH

6RPHHVSHFLDOO\WURXEOHGVRXOVPD\SURYHWREHSRWHQWLDOEOHHGHUVWKHPVHOYHV7KRVHIHZZKRKDYHWKHODWHQWJLIWDUH UHYHUHQWO\ WDNHQ WR D VSHFLDO VDQFWXDU\ZKHUH WKHFXUUHQWEOHHGHUVKDQJWKHPE\WKHDQNOHVDQGFXWWKHPDOORYHUVRWKDWWKH\VWHDGLO\VHHSRXWWKHLUOLIHLQWRWKHHDUWK7KH\KDQJIRUKRXUVDIWHUZKLFKWKHLUVSLULWVDULVHDV%OHHGHUVWKHPVHOYHVZKLOHWKHLUERGLHVEHJLQWRGHFRPSRVH

)RUHQVLF 3DWKRORJ\ $ VXLFLGH YLFWLP ZKR ZDVSUHYLRXVO\D FDQGLGDWH IRU WKHEOHHGHUVDWWHQWLRQZLOODOZD\VXVHUD]RUVRUNQLIHEODGHVWRGRDZD\ZLWKKLPRUKHUVHOI 7KHFDXVHRIGHDWK LVREYLRXV EORRG ORVVEXWWKHSDWKRORJLVWZLOODOVRQRWLFHPDQ\VPDOOHUROGHUZRXQGV RQ WKH ERG\ 6RPH RI WKHVH DUH VPDOO DQGREYLRXVO\VHOILQLFWHGZKLOHWKHROGHUZRXQGVWKRVHOHIWE\ WKHEOHHGHUDUH ORQJHUDQGVHHPWRKDYHEHHQLQFLVHGGHHSHU

0RVWQRWDEOH LV WKHORFDWLRQDQGGLUHFWLRQRIWKHROGHUZRXQGV7KH\DUHSODFHGLQVXFKDZD\WKDWWKHYLFWLPFRXOGQRWHDVLO\KDYHLQLFWHGWKHPXSRQKLPVHOI)RUH[DPSOHDORQJWKLQSDOHVFDUPLJKWEHIRXQGUXQQLQJDFURVV WKH EDFN RU VWHDGLO\ WUDFHG DFURVV WKH ULJKWVKRXOGHURIDULJKWKDQGHGSHUVRQ

)RUHQVLF3V\FKRORJ\7KRVHZKRWKHEOHHGHUVYLVLWDUHQHYHUSDQLFNHGRUHYHQVFDUHGE\WKHH[SHULHQFH7KH\UHPHPEHU LW DV D KD]\ DOPRVW UDSWXURXV PRPHQW RIUHOLHI

$ SV\FKRORJLVW ZKR VSHDNV WR VRPHRQH EHIRUH DQGDIWHU WKH\ DUH FXW E\ D EOHHGHU ZLOO QRWH D GHQLWHLPSURYHPHQWLQWKHLUPHQWDOFRQGLWLRQ7KH\VHHPWREHOHVVVWUHVVHGPRUHDWHDVHLQWKHLURZQVNLQ

3V\FKRORJLFDOO\ VSHDNLQJ WKHUH LV SUDFWLFDOO\ QRGLVWLQFWLRQEHWZHHQDVHOIKDUPHUZKRZDV LQFXOFDWHGLQWR WKH SUDFWLFH E\ WKH EOHHGHUV DQG RQH ZKR VHOIKDUPV LQ WKH RUGLQDU\ ZD\ 7KH RQO\ GLVWLQFWLRQ LVWKDW WKH IRUPHU H[KLELWV PXFK PRUH RI D FUDYLQJ IRUWKHEODGHDQGQHYHUVHHPVWRVXIIHUIURPVHOIUHSURDFKDIWHUZDUGVWKHUHLVQRFRQVFLRXVQHVVWKDWVHOILQMXU\LVDQ\WKLQJEXWDJRRGDQGQHFHVVDU\WKLQJ

3DWKRORJ\ 7KH ERG\ RI D EOHHGHU VXEMHFW LV XVXDOO\FRYHUHG LQ OLWWOH ZRXQGV ZLWK ROGHU ODUJHU RQHV OHIWIURPWKHRULJLQDOEOHHGHUYLVLWDQGIURPDQ\RWKHUPRUHUHFHQWYLVLWV6HHXQGHU)RUHQVLF3DWKRORJ\DERYH

*DPH6WDWLVWLFV

$WKOHWLFV+HDOWKZKHQPDQLIHVW0HGLF6FXILQJ6KULQN

+LW7KUHVKROG

6WHDOWK0RGLHUQRFRQWDFWZLWKJURXQG

:HDSRQEOHHGHUEODGH

$UPRUYV6KRRWLQJYV6FXILQJ

%OHHGHUYLVLWVDUHVLPLODUWRWKRVHYDPSLUHVDUHVDLGWR

PDNH7KH\DUHDFWLYHRQO\DIWHUGDUNXVXDOO\DURXQGWKH KRXU RI PLGQLJKW ZKHQ WKH\ KRYHU RXWVLGH WKHZLQGRZV7KH\FKRRVHWRYLVLWWKRVHZKRDUHHVSHFLDOO\WURXEOHG LQPLQG VXFK DV DGROHVFHQWVZKR DUH EHLQJSHUVHFXWHG DW VFKRRO EDWWHUHG ZLYHV RU VWUHVVHGUHFHQWO\GLYRUFHGPHQLQWKHWKURHVRIDPLGOLIHFULVLV

2QO\ RQH LQ YH EOHHGHU SURWpJpV LV PDOH WKRXJKZKHWKHUWKLVLVEHFDXVHWKHEOHHGHUVFKRRVHZRPHQRXWRISUHIHUHQFHRUEHFDXVHZRPHQVXIIHULQVLOHQFHPRUHWKDQPHQGRLVQRW\HWHVWDEOLVKHG

%OHHGHUV DOPRVW QHYHU JKW :KHQ WKH\ GR LW LV WRSURWHFW WKHLUSURWpJpVRUJXDUG WKHLUSK\VLFDO UHPDLQVIURPGHWHFWLRQ

+RYHU%HLQJJKRVWO\ FUHDWXUHVEOHHGHUV FDQKRYHU LQWKHDLU

6FHQW 7ULEXODWLRQ %OHHGHUV DUH GUDZQ WR SV\FKLFDQJVW $ EOHHGHU FDQ WHOO WKH DSSUR[LPDWH 6WDELOLW\OHYHORIDOOFUHDWXUHVZLWKLQKDOIDPLOHRILW WKRXJKLWFDQQRWVHQVHWKHLUSUHFLVHORFDWLRQV,WFDQKRPHLQRQHVSHFLDOO\WURXEOHGSHRSOHOLNHDVKDUNVFHQWLQJEORRGLQWKHZDWHU

(VRWHUURULVWV 1RWH 7KHUH KDYH EHHQ FDVHV RI 2UGR9HULWDWLV PHPEHUV ZKR DUH PRUH H[SRVHG WR VDQLW\VKUHGGLQJ KRUURU WKDQ PRVW DQG WKXV VWDQG RXW OLNHEHDFRQVIRUPLQJDVWUDQJHV\PELRWLFUHODWLRQVKLSZLWKEOHHGHUVZKRVHHPWRUHVSHFWWKHLUZLOOLQJQHVVWRVXIIHUIRURWKHUVSHDFHRIPLQG

7KHEOHHGHUVZLOO W\SLFDOO\PDNHFRQWDFWDIWHUDPDMRULQYHVWLJDWLRQWKDWOHIWWKHDJHQWVVDQLW\EDGO\WDWWHUHGDQG XVH WKHLU NQLYHV WR UHOLHYH WKH DJHQWV VXIIHULQJSV\FKH)URPWKHUHRQLQWKHEOHHGHUVNHHSWKHDJHQWVDQHZKLOHLQUHWXUQWKHDJHQWLVH[SHFWHGWRHQVXUHWKDWWKH2UGR9HULWDWLV NHHSV LWV DWWHQWLRQV DZD\ IURP WKHEOHHGHUVDQGWKHLUZRUN7KLVUDSLGO\WXUQVLQWRDVWDWHRIGHSHQGHQF\IRUWKHDJHQWZKREHJLQVWRUHO\RQWKHEOHHGHUVDVDVRXUFHRIVWDELOLW\PXFKDVRWKHUVWXUQWRGULQNRUGUXJV

1DWXUDOO\ VXFK D VLWXDWLRQ LV DQ DEVROXWH GLVDVWHU IRUWKH 2UGR 9HULWDWLV $Q DJHQWZKR FDQQRW EH WUXVWHGLV DPDMRU OLDELOLW\ DQ DJHQWZKR FROODERUDWHVZLWK DVXSHUQDWXUDO HQWLW\ LV HIIHFWLYHO\ D )LIWK &ROXPQLVW7KRVH LQWKHNQRZDUHFDUHIXO WRNHHSDQH\HRQWKHLUIHOORZ DJHQWV WR VHH LI DQ\ VXVSLFLRXV VFUDWFKHV HYHUDSSHDU

&DOPLQJ $XUD 'HVSLWH LWV VWDUWOLQJ DSSHDUDQFH WKHEOHHGHULVQRWDWDOOIULJKWHQLQJ,WHPLWVDQDWPRVSKHUHRISV\FKLFFDOPDVRUWRIPHQWDODQHVWKHVLDWKDWSXWVWKRVH DURXQG LW FRPSOHWHO\ DW HDVH 8QOLNH RWKHUVXSHUQDWXUDOFUHDWXUHVVHHLQJDEOHHGHUGRHVQRWUHVXOWLQ6WDELOLW\ORVVXQOHVVLWLVYLHZHGDWDGLVWDQFHRXWRIWKHUDQJHRILWV&DOPLQJ$XUD

,W LV YHU\ KDUG WR IRUFH \RXUVHOI WR FRPPLW DFWV RIYLROHQFHZKHQ\RXDUHLQDEOHHGHUVSUHVHQFH(YHQWKHWKRXJKWRIDWWDFNLQJDQRWKHUSHUVRQRUFUHDWXUHVHHPVUHYROWLQJ$FKDUDFWHUFDQIRUFHKLPVHOIWRFDUU\RXWDYLROHQWDFWVXFKDVDWWDFNLQJWKHEOHHGHUE\ZLOOLQJO\VSHQGLQJ WKUHH SRLQWV RI 6WDELOLW\ 7KLV JLYHV KLPIUHHGRPWRDFWYLROHQWO\IRUWKHUHPDLQGHURIWKHVFHQHEXWQRWSDVWWKDW

,QFRUSRUHDO7KHEOHHGHU VSHQGVPRVWRI LWV WLPHDV DEOXUUHG VSHFWUDO VKDSH YLVLEOH RQO\ RXW RI WKH FRUQHURI WKH H\H RU WR WKRVH ZLWK SV\FKLF WDOHQWV :KLOHLQFRUSRUHDO LW LJQRUHVSK\VLFDO EDUULHUV VXFKDVGRRUVDQGZDOOVDQGFDQQRWEHKDUPHG,WFDQRQO\LQWHUDFWZLWKPDWHULDOWKLQJVLQFOXGLQJSHRSOHZKLOHPDQLIHVW,WFDQRQO\PDQLIHVWEHWZHHQGXVNDQGGDZQDQGWKHUD\VRIWKHVXQLQVWDQWO\UHYHUWLWWRLQFRUSRUHDOIRUP

7KH RQO\ ZD\ WR GHVWUR\ D EOHHGHU LV WR GLJ XS WKHSK\VLFDOUHPDLQVDQGGHVWUR\WKHPFRPSOHWHO\E\UHDFLGRUVLPLODUPHDQV3K\VLFDOZRXQGVGHDOWWRLWZKLOHLWLVPDQLIHVWMXVWRSHQEORRGOHVVJDSVLQLWVERG\7KHVHGRQRWKHDOEXWWKH%OHHGHUFDQVWLWFKWKHPVKXWWRDYRLGLQFRQYHQLHQFH,IWKHEOHHGHULVUHGXFHGWR]HUR+HDOWKZKLOH PDQLIHVW LW LPPHGLDWHO\ EHFRPHV LQFRUSRUHDODQGFDQQRWPDQLIHVWDJDLQXQWLOWKHQH[WQLJKW

/HW %ORRG %\ XVLQJ LWV EODGHV WR UHOHDVH EORRG IURPWKHWDUJHWWKHEOHHGHUFDQKHOSWKHWDUJHWWRFRSHZLWKPHQWDOGLVWUHVV7KHEOHHGHUFDQVSHQGSRLQWVIURPLWV6KULQNSRROWRUHVWRUHORVW6WDELOLW\ WRWKHWDUJHWRQDRQHIRURQHEDVLVEXWIRUHYHU\WKUHHSRLQWVRI6WDELOLW\UHVWRUHGLQWKLVZD\DSRLQWRI+HDOWKLVORVWIURPWKHODFHUDWLRQVWRDPLQLPXPRIRQHSRLQW

%/(('(5

%/22'&2536(7KLVLVZKDW,VDZ

$EDFNDOOH\LQDELJFLW\HPSW\EXWIRUZLQGEORZQKHDSVRIWUDVKIRRGSDSHUVDQGGLQWHGFDQV

,QWKHVKDGRZRIDGRRUZD\DSDOHJXUHLQDWDWWHUHGFRDW 7KH KHDG LV VFDEEHG DQG DNLQJ DV LI ZLWKSVRULDVLV$ER\LVEHIRUHKLPRQKLVNQHHVSUREDEO\QRPRUHWKDQVL[WHHQ7KH MDFNHWKHZHDUVZDVRQFHEOXH1LJKWVVSHQWVOHHSLQJURXJKLQRWKHUGRRUZD\VKDYHJULPHGLWOLNHDJDUDJHRRU

7KHJXUHURFNVWKHER\EDFNDQGIRUWK7KHER\OLPSRIIHUVQRUHVLVWDQFH

+LVQDPHLVQRWLPSRUWDQW1RQHRIKLVIULHQGVNQHZZKDWKLVSDUHQWVKDGFDOOHGKLPDQ\ZD\7KLV LVDQDQRQ\PRXV SODFH RQO\ WKH KRW PHDW RI WKH ERG\PDWWHUV QRW WKH QDPH 2Q WKH VWUHHWV HYHU\WKLQJIHHGV RII HYHU\WKLQJ HOVH

JULSKLVVKRXOGHUVWLJKWO\&ODZVOLNHWZRIRRWFDWKHWHUVJUD\DVOWK\JODVVKDYHVSHDUHGWKURXJKWKHSDGGLQJRIKLVMDFNHWDQGLQWRKLVERG\FDYLWLHV$UHGEXEEOLQJRZUDFHVWKURXJKWKHPVXFNHGXSE\WKHJURDQLQJWKLQJ,WURFNVEDFNDQGIRUWKEDFNDQGIRUWKLQLWVSOHDVXUH

7KHGHDGER\VIDFHEHJLQVWRWLJKWHQLQZDUGVIURPWKHVXFWLRQ 7KH H\HV UHWUHDW LQWR WKH VNXOO 7KH OLSV GUDZEDFN IURP WKH WHHWK LQ DQ LQYROXQWDU\ JULPDFH +HVKULQNV DQG FUXPSOHV OLNH DGHDWLQJ UXEEHU WR\ZLWKERQHVLQ7KHWKLQJVKDNHVKLPKDUGHUWU\LQJWRORRVHQPRUH XLGV IURP GHHSHU ZLWKLQ ,W VXFNV KDUGHU DQGIDVWHU

7KHER\VERG\FRQYXOVHV

7KHUH LV D UDWWOLQJ JXUJOH OLNH D FKLOG QLVKLQJ DPLONVKDNH

6ORZO\UHOXFWDQWO\WKHVOLFNFODZVZLWKGUDZ7KHERG\VLOHQWO\ JLYHV LQ WR JUDYLW\ FROODSVLQJ EDFNZDUGV LQWRWKHDOOH\ZLWKRXWDQ\IXVV,WKDVQRWKLQJRIWKHKXPDQDERXWLWDQ\PRUH7KHOLPSZKLWHFDUFDVVLVMXVWDWKLQJFROGYHDO

7KHFUHDWXUHVFDUZUHFNRIDIDFHLVKDSS\,WFORVHVWKHWHDEDJFRORUHGJREV WKDWZHUH H\HV0RVW RI LWV MDZ LVKDQJLQJ RII DQG WKH OLSV DUH EXUVW DQG UDJJHG EXW LWVPDFNVWKHPDQ\ZD\DVLILWUHPHPEHUHGKRZLWIHOWWRQLVKDERZORIKRWVRXSRQDZLQWHUVGD\

7KHFRDWLWZHDUVLVVRSSLQJZLWKPXFXVDQGEORRG%XWIRUWKDWLWLVDQDNHGURWWHQEXONRIPXVFOHOLYLGZLWKZULJJOLQJYHLQV+RWEORRGYHVVHOVWKUHDGXQGHUWKHVNLQOLNH IDW FDEOHV SXOVLQJ EXUVWLQJ WKH VXUIDFH 7KH OLWWOHYHLQVXQGHULWVVNLQDUHOLYLGDQGPRELOHDVPHDOZRUPVLWFKLQJ 7KRVH LQ LWV DUPV DUH VZROOHQ PDVVLYHO\ OLNHVDXVDJHEDOORRQVJURVVWDXWDQGVKLQ\QHHGLQJRQO\DWRXFKWREXUVWWKHP7KHZKROHFUHDWXUHWKUREV$OLWWOHEORRGVSUD\VIURPWKHKHDGOLNHDOHDNLQDJDUGHQKRVHZKHUHWKHUHDUHVKDOORZSLQNWUHQFKHVSORXJKHGLQWKHVNXOO7KHER\WULHGWRJKW

/DWHU QR GRXEW KDUGHQHG IRUHQVLF LQYHVWLJDWRUV ZLOOWXUQSDOHZKHQWKH\DQDO\]HWKHQHFURWLFPDWWHUXQGHUWKHER\VQDLOV7KHVNLQDQGHVKEHORQJVWRDERG\WKDWKDVEHHQGHDGIRUPRQWKV

)URPWKHGLDU\RI7KRPDV3HSSHU

7KLVLVKRZ,ZLOOGLH7KH WKLQJ KDVPH , KHDU D SRSSLQJ WHDULQJVRXQGDQGIHHODVHDULQJSDLQ,WRQO\ODVWVIRUDVHFRQGDQGWKHQDZDWHU\JLGGLQHVVZDVKHVRYHUPH0\YLVLRQPLVWVRYHU,DPRDWLQJZHLJKWOHVV'LPO\,UHFRJQL]HWKDWSDUWRIP\ERG\VWLOOEXUQVDQGWKHUHLVVRPHWKLQJ VWXFNEXW LW IHHOV OLNH VRPHRQHHOVHVSDLQ7KHUHLVDVSDVPLQP\OXQJVDQGDWLFNOHLQP\WKURDWDVLI,KDGLQKDOHGZDWHU,FRXJKDQGDQDODUPLQJEOXUWRIEORRGOOV\RXUPRXWK0\OLPEVWLQJOHSULFNOHDQGEHJLQ WR IHHO VWUDQJHO\ FROG6RPHWKLQJ LV VKDNLQJPHOLNHD UDJGROO ,KHDUDSXPSLQJ UXVKLQJ VRXQG OLNHWKHEHDWLQJRIDKXJHXQQDWXUDOKHDUW:LWKHYHU\SXOVHWKHUHLVDVKDUSWXJLQ\RXUJXWV

,DPIDGLQJDZD\DVLI\RXZHUHIDOOLQJLQWRGDUNZDWHU7KHWDVWHRIEORRGLVWKLFNLQP\PRXWKDQG,VKRXOGIHHOSDQLFRUDW OHDVWGRLQJVRPHWKLQJEXW , FDQQRWPDNHP\DUPVDQGOHJVPRYH,WU\WRVSHDNEXWRQO\DEORRG\JXUJOHFRPHVRXW0\KHDGVDJV$ZDYHRIKRWFKRNLQJZHWQHVVRRGVLQWRP\PRXWK7KHODVWVLJKW,VHHLVDEODFNGRWZLWKDUHGVKLPPHULQJKDORHQODUJLQJ

$QRWHIRXQGLQWKHSRFNHWRIDGHDGYDJUDQW

*DPH6WDWLVWLFV

$WKOHWLFV+HDOWK6FXILQJ

+LW7KUHVKROG

$OHUWQHVV0RGLHU

6WHDOWK0RGLHUYLOHVWHQFK

:HDSRQ7DORQV

$UPRUYV6KRRWLQJ

%ORRG FRUSVHV DUH SXWULG EORRG MXQNLHV 7KH\ IHHO WKHXUJHIRUZDUPOLIHXLGVDVDFRQVWDQWLWFKDQGFUDYLQJLQWKHLUSXII\YHLQV$OOWKH\ZDQWLVWRSXPSPRUHDQGPRUHRILWLQVXFNLQJLWXSWKURXJKWKHLUQHHGOHWDORQVPRDQLQJDVWKH\GR

8QOLNH WKH VKDPEOLQJ ]RPELHV RI 5RPHURV PRYLHVWKHVH FUHDWXUHV DUH FUDIW\ DQG FXQQLQJ 7KH\ OXUN LQ

SODFHV ZKHUH WKH GUHJVRIVRFLHW\JROLNHUDLOZD\DUFKHV ZKHUH WKH KRPHOHVV

VOHHS RU GDUN EDFN VWUHHWVZKHUH VOHHSLQJGUXQNVFDQEHVQDWFKHGXSDQGGUDLQHG$VWKH\H[LVWWRIHHGUDWKHUWKDQWRNLOOWKH\GRQW

QHFHVVDULO\IHHOWKHQHHGWRWDNHRQDOOFRPHUVRUJKWDWDGLVDGYDQWDJH$EORRGFRUSVHZLOOQHYHUPRXQWDODVWVWDQGXQOHVVLWLVVRKXQJU\WKDWLWKDVWRGULQN

3K\VLFDOO\WKHEORRGFRUSVHORRNVOLNHDWDOOKXPDQRLGZLWKORQJOLPEV,WVDUPVHQGLQKXJHGDJJHUOLNHWDORQVZKLFKDUHKROORZDQGVKDUSDVUD]RUV'HSHQGLQJRQLWVVWDWHRIGHFRPSRVLWLRQZKHQLWDURVHLWVERG\LVHLWKHUVFDEEHG ZLWK PRXOG RU KDV EURDG FUDWHUV RI OHSURXVFRUURVLRQ LQ LWV HVK UHYHDOLQJ \HOORZ ERQH 7KHFUHDWXUHVYHLQVDOZD\VEXOJHRXWYLVLEO\DQGSXOVH7KHYDVFXODUV\VWHPGHFD\VPXFKPRUHVORZO\WKDQWKHUHVWRIWKHEHDVW

7KH EORRG FRUSVHZLOO OLWHUDOO\ GUDLQ LWV YLFWLP GU\ LIJLYHQ WKH RSSRUWXQLW\ 2QFH LW HQWHUV WKLV SHUYHUVHHXSKRULDWKHFUHDWXUHZLOOQRWDWWDFNDQ\RQHHOVHXQOHVVLQVHOIGHIHQVH,WZLVKHVWRVDYRUWKHZDUPVHQVDWLRQLQLWVYHLQVXQGLVWXUEHGIRUDVORQJDVSRVVLEOH

7KH FUHDWXUHV HFVWDV\ VRRQ IDGHV7KH ORQJHU DEORRGFRUSVHOLYHVWKHPRUHRIWHQLWQHHGVWRIHHG,WQRORQJHUJHWVWKHVDPHUXVKDVLWXVHGWRIRUTXLWHVRORQJDQGKDVWRKXQWVHYHUDOWLPHVDQLJKWWRVODNHLWV OXVW6RPHRIWKHPRUHDQFLHQWVKULYHOHGFRUSVHVNHHSOLYLQJYLFWLPVVWRUHG LQ WKHLU ODLUV LQ PXFK WKH VDPH ZD\ WKDW DQDOFRKROLFZLOOFDFKHOLTXRUDURXQGWKHKRXVH7KH\WKHQZRUN WKURXJK HDFKYLFWLP LQ WXUQ WDNLQJXS DZKROHQLJKWZLWKDQRUJLDVWLFELQJHRIEORRGGUDLQLQJ

$OO7KDW5HPDLQV

(YLGHQFH &ROOHFWLRQ 7LQ\ IUDJPHQWV RI GHFRPSRVHGVNLQDQGHVKDUHVRPHWLPHVIRXQGXQGHUWKHYLFWLPVQDLOVDQGVKHGLQWKHLPPHGLDWHDUHD7KHVHSURYHWREHKXPDQ WKRXJKH[WHQVLYHO\GHFD\HG 7KH LPSULQWVRIEDUHKXPDQ IHHW FDQEH IRXQGZKHQ WKHJURXQG LVVRIW

)RUHQVLF $QWKURSRORJ\ 7KH VWDWH RI WKH ERG\ RI DSHUVRQ NLOOHG E\ D EORRG FRUSVH GHSHQGV RQZKHWKHUWKHEHDVW LVDEOH WR WDNH LWV IXOOSOHDVXUH IURPWKHNLOO:KHQ WKH FRUSVH KDV EHHQ LQWHUUXSWHG WKH ERG\ LVSDOOLGDQGFRQWRUWHG'HHSSXQFWXUHZRXQGVDUHIRXQGRQ WKH VKRXOGHUV RU DEGRPHQ WKH ERG\V ERQHV EHQWDVLGHRUVSOLQWHUHGE\WKHLQWUXVLRQRIVRPHVWDNHOLNH

%/22'&2536(

IRUHLJQREMHFW0DVVLYHEORRGORVVLVHYLGHQWZLWKPXFKPRUHEORRGVRDNLQJWKHFORWKHVWKDQWKHZRXQGVZRXOGRUGLQDULO\DFFRXQWIRULWRR]HVOLEHUDOO\IURPHYHQOLJKWVFUDWFKHV7KLVLVEHFDXVHWKHEORRGFRUSVHVWDORQVKDYHDQDQWLFRDJXODQWHIIHFWFDXVLQJEORRGWRWKLQVRWKDWLWFDQEHVXFNHGXSHDVLO\

:KHQWKHFRUSVHKDVEHHQDEOHWRIHDVWWRLWVIXOOH[WHQWWKH YLFWLPV ERG\ LV VKULYHOHG DQG VWDUNZKLWH 7KHVDPHZRXQGVDUHIRXQGWKHLUHGJHVUDJJHGEXWSUDFWLFDOO\QREORRGLV HYLGHQW 7KH WUHPHQGRXV

VXFWLRQPHDQVWKDWVRPHRIWKHVRIWHUYLVFHUDDQGERG\XLGVDUHGUDLQHGDORQJZLWKWKHEORRGHPSW\LQJRXWSDUWRIWKHERG\FDYLW\DVLIDJURVVVWUDZKDGVXFNHGRXWWKHOLYHUDQGOLJKWV

)RUHQVLF (QWRPRORJ\ $OWKRXJK WKLV GHWDLO LV QRWVWULFWO\VSHDNLQJ WRGRZLWKWKHXVHRIHQWRPRORJ\WRGHWHUPLQH WLPHRIGHDWK DQHQWRPRORJLVW LVERXQG WRSLFNLWXSDQDO\VLVRIWKHYLFWLPVEORRGGHWHFWVDVLPLODUDQWLFRDJXODQWWRWKDWXVHGE\EORRGGUDLQLQJLQVHFWV

:KHUH7KH\&RPH)URP:KHQDSHUVRQGLHVLQWKHJULSRI DQ DGGLFWLRQ RU QHHG VR VWURQJ WKDW LW RYHUZKHOPVWKHLU WKRXJKWV DQG EORWV RXW WKHLU SHUVRQDOLW\ WKHFUDYLQJFDQVRPHWLPHVKROGWKHGLVHDVHGVSLULWERXQGWRWKHERG\

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

$EORRGFRUSVHFDQUHVXOWIURPDQ\IDWDOO\FRPSXOVLYHEHKDYLRU 7KHUH LV HYHQ RQH VWUDJJOHKDLUHG KRUURUURDPLQJ DEURDG VWDONLQJ WKH VWUHHWV DIWHU GDUN DQGSUH\LQJRQKDSS\ZRPHQ+HUEXOLPLDNLOOHGKHUDQGVKH QRZ ELQJHV RQ KRW EORRG LQVWHDG RI RQ FKRFRODWHEDUV

,QWHOOLJHQFH/HYHO%ORRGFRUSVHVDUHFXQQLQJEXWQRWHVSHFLDOO\ LQWHOOLJHQW 7KH\ LQVWLQFWLYHO\ KLGH GXULQJWKHGD\DQGNHHSWRWKHVKDGRZVDWQLJKW6RPHZHDUUHPQDQWV RI FORWKLQJ VR WKH\ FDQ EH PLVWDNHQ IRUGHUHOLFWVDWDGLVWDQFH

0XFK DV LW ZDV LQ OLIH WKHLU SV\FKRORJ\ LV RQH RIRYHUSRZHULQJQHHG%ORRGLVHYHU\WKLQJWKH\PXVWJHWLW7KH\DUHQRWDEOHWRWKLQNPXFKEH\RQGWKLVQRUFDQWKH\PDNHFRPSOLFDWHGSODQVRUDQWLFLSDWHWKHEHKDYLRURIRWKHUV

%ORRG'UDLQ7KH EORRG FRUSVH FDQGUDLQ EORRG IURPLWVYLFWLPVOXUSLQJLWXSWKURXJKLWVIHHGLQJWXEXOHV%\VSHQGLQJ DGGLWLRQDO6FXILQJ SRLQWV SULRU WRPDNLQJDQ DWWDFN LW FDQ LQLFW DQ DGGLWLRQDO SRLQW RI+HDOWKGDPDJHRQ WKHYLFWLP WRDPD[LPXPRI WKUHHSRLQWV7KHVH DGGLWLRQDO SRLQWV DUHQRW DGGHG WR WKH FRUSVHV6FXILQJUROODQGLIWKHDWWDFNPLVVHVWKH\DUHZDVWHG+HDOWKSRROSRLQWVORVWIURPEORRGGUDLQDUHDGGHGWRWKHFRUSVHVRZQ+HDOWKSRRO

1H[W URXQG WKH LPSDOHG YLFWLP PXVW VXFFHHG LQ DQRSSRVHG$WKOHWLFVRU6FXILQJFRQWHVWYLFWLPVFKRLFHDJDLQVW WKHEORRGFRUSVH WRSXOO WKH WDORQVRXW ,I WKHYLFWLPIDLOV LQGRLQJWKLVWKHEORRGFRUSVHPD\VSHQG6FXILQJSRRO SRLQWV WRGUDLQ+HDOWK SRLQWV IURP WKHYLFWLPRQDRQHIRURQHEDVLVDJDLQ WRDPD[LPXPRIWKUHHSRLQWVSHUURXQG

$ EORRG FRUSVH WKDW VXFFHHGV LQ GUDLQLQJ EORRG JRHVLQWRDVWDWHRIUDSWXUH7KLVHXSKRULFJORU\ODVWVIRURQHKRXUXQOHVVWKHFRUSVHZDVXQDEOHWRGUDLQOHVVWKDQSRLQWVRI+HDOWK LQZKLFKFDVHLWODVWVIRUPLQXWHV7KHFRUSVHZLOOQRWDWWDFNGXULQJWKLVSKDVHH[FHSWWRFRQWLQXHIHHGLQJIURPDWDUJHWWKDWLWLVODWFKHGRQWR

7UDFN %ORRG %ORRG FRUSVHV FDQ VQLII RXW HYHQ WLQ\DPRXQWVRIIUHVKO\VSLOOHGEORRGVXFKDVIURPDZRXQGRUHYHQDQRVHEOHHGZLWKLQIHHWE\VHQVHRIVPHOO,IWKH VRXUFHRI WKHVFHQW LVXSZLQG WKH UDQJH LQFUHDVHVWR IHHW LI GRZQZLQG LW GURSV WR IHHW )RU WKHSXUSRVHV RI WKLV DELOLW\ IUHVK EORRG LV WKDW KDV EHHQVKHGQRORQJHUWKDQRQHKRXUEHIRUH

:KHQ WKH EORRG FRUSVH VQLIIV EORRG RQ WKH DLU WKHH[DFW ORFDWLRQ RI WKH VRXUFH LV QRW UHYHDOHG EXW RQO\LWV SUHVHQFH VRPHZKHUHZLWKLQ UDQJH7KH FRUSVH FDQDOZD\V WHOO WKH GLUHFWLRQ RI WKH VFHQW :KHQHYHU WKHFRUSVH FRPHVZLWKLQ DUPV UHDFKRI WKH VRXUFH LW FDQLPPHGLDWHO\WHOOWKHVRXUFHVORFDWLRQXQOHVVWKHVRXUFHKDV VXFFHVVIXOO\ KLGGHQ 7KLV LV KDUG WR GR D EORRGFRUSVHJDLQVD$OHUWQHVV0RGLHUZKHQEOHHGLQJRUEORRGLHGFKDUDFWHUVDUHDWWHPSWLQJ,QOWUDWLRQWHVWVWRKLGHIURPLW

%ORRGFRUSVHVFDQDOVRWUDFNFUHDWXUHVWKDWDUHEOHHGLQJRUWKDWKDYHEORRGRQWKHP7KHSURPLVHRIIUHVKEORRGDOVRJLYHVLWDVXUJHRIHQHUJ\DOORZLQJLWWRUXQIDVWHU(YDGLQJDSXUVXLQJEORRGFRUSVHLVWKXVYHU\GLIFXOWZKHQFKDUDFWHUVZKRDUHEOHHGLQJRUEORRGLHGDUHWU\LQJWRHHIURPDEORRGFRUSVHXVLQJ)OHHLQJRU$WKOHWLFVWKHFRUSVHUROOVDJDLQVWD'LIFXOW\RIUDWKHUWKDQ

%/26620(5([SODQDWRU\1RWH7KHIROORZLQJLVDQDPDWHXUWUDQVFULSW RI DQ PS OH EORVVRPPSZKLFK SXUSRUWV WR EH D JHQXLQH SROLFHLQWHUYLHZ ,W ZDV XSORDGHG WR WKH :HELQ 6HSWHPEHU DQG PDNHV LWV UVWDSSHDUDQFH LQ D ELQDULHV QHZVJURXSDOWVH[FWKXOKX

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

7KHIXURUVXUURXQGLQJWKHLWHPKDVORQJVLQFHGLHGGRZQDQG RQO\ D IHZ ZHEVLWHV VWLOO NHHS LW DUFKLYHG 7KHUH LVRQHGLVFXVVLRQJURXSGHGLFDWHGWRWKHFOLSRQZKLFKVHOIDSSRLQWHGH[SHUWVDUJXHZLWKRQHDQRWKHUDWOHQJWKDERXWZKRZDVXOWLPDWHO\UHVSRQVLEOHIRULW

)URP*DUHWK0LFKDHOLVNDNUDIQ#KRWPDLOFRP

6XEMHFW%ORVVRPHUPSWUDQVFULSW

1HZVJURXSVDOWVH[FWKXOKX

'DWH367

,QWHUYLHZZLWK6DQGUD3%LFNHQVWDII

3UHVHQW'HW,QVS&URFNIRUG6JW0DQIUH\

&52&.)25' 6DQG\ZHNQRZ WKLV LVGLIFXOWEXWZHQHHGWRDVN\RXVRPHTXHVWLRQV:HQHHGWRDVN\RXDERXWWKHVFKRRODERXWWKHJURXS\RXDQG\RXUIULHQGVVWDUWHG7KHJURXS0U:DEHPDGH\RXVWDUW:HYHJRWKLPQRZ6DQG\+HVLQFXVWRG\

JULVWOH IURP EHKLQGKLVNQHHVDQG WKRXJKVRPH RI XV JDJJHG ZH

KHOGWRRXUGXW\ MXVWDVKHKHOGWRKLV0U:DEHKDGWKHKRQRXUWR WHDURIIKLVSKDOOXVZLWKKLV WHHWK , KDG WKHUVW ELWH

RIWKHJOLVWHQLQJPXVFXODWXUHZKHUHLWKDGEHHQ+LVIDFHZDVWKHIDFHRIDPDQLQUDSWXUH

ZRPHQ WKH PRWKHUVWREH HDW WKH UHPDLQGHU RI LWVERG\ DV WKH XQQDWXUDO IHWXVHV QHHG WKHLU IDWKHUVGHPRQHQULFKHGHVKWRGHYHORSSURSHUO\

$SSHDUDQFHDQG%HKDYLRU7KHEORVVRPHULVOLWWOHPRUHWKDQDKXPDQFRUSVHWKDWLVWHUPLQDWHGDWWKHZDLVW$OWKRXJKLWSDGVDURXQGRQLWVKDQGVGUDJJLQJVKUHGVRILQWHVWLQHDQGVNLQDURXQGLW LV VXUSULVLQJO\ VZLIW DQG DVVXUHG WKH FUHDWXUH FDQVFXWWOHDFURVVDRRUDQGVFUDPEOHXSDZDOOZLWKHDVH

7KH EORVVRPHUV RQO\ IXQFWLRQ LV WR FUHDWH GHPRQEDELHV DQG LW ZLOO RQO\ JKW LQ IXUWKHUDQFH RI WKLVDLP ,I DQ\WKLQJ LV LPSHGLQJ LW IURP PDWLQJ ZLWK DFXOWPHPEHU LWZLOODWWDFNWKHREVWDFOHDQGLIDQ\RQHDWWHPSWVWRLQWHUUXSWLWLWZLOOJKWEDFNEXWRWKHUZLVHLWZLOO LJQRUHHYHU\WKLQJDSDUWIURPWKHQH[WDYDLODEOHZRPDQ :KHQ LW KDV QLVKHG LW EHFRPHV LQHUW DQGZDLWVIRUWKHFXOWLVWVWRHDWLW

5HVLOLHQFH7KHSUHVHQFHRI WKHGHPRQLF VSLULWZLWKLQWKHEORVVRPHUVGHDGWLVVXHVJLYHVLWXQQDWXUDOUHVLOLHQFHWRSK\VLFDOLQMXU\:KLOHLWLVLPSUHJQDWLQJLWVKDUHPLWJDLQVDUPRUYHUVXV6KRRWLQJDQG6FXILQJDOLNH

6ZLIWQHVV7KHEORVVRPHUVVWDJJHULQJXQJDLQO\PRWLRQJLYHVQRKLQWRILWVDELOLW\WRODXQFKLWVHOIWKURXJKWKHDLURQLWVSRZHUIXODUPV,ILWLVFKDVLQJDSRWHQWLDOYLFWLPRUHHLQJFDSWXUHLWUROOV$WKOHWLFVDJDLQVWDGLIFXOW\QXPEHURIUDWKHUWKDQ

,PSUHJQDWLRQ0DGQHVV 7KH YLFWLP RI D EORVVRPHUVLPSUHJQDWLRQ VXIIHUV DPDVVLYH DVVDXOW RQ KHU VDQLW\,PPHGLDWHO\IROORZLQJLPSUHJQDWLRQVKHPXVWPDNHDSRLQW6WDELOLW\WHVW

,I WKHYLFWLPHQGVXSZLWK6WDELOLW\ RU OHVVGHVFHQWLQWRPDGQHVVLPPHGLDWHO\IROORZV7KHYLFWLPFDQVWLOODWWHPSWWRFRQYHUVHUDWLRQDOO\EXWODSVHVLQWREDEEOLQJRU PRQRWRQRXV FKDQWLQJ DIWHU D IHZ VHQWHQFHV ,W LVSRVVLEOH WR UHOLHYH WKLVPDGQHVV E\ XVLQJ WKH6KULQNDELOLW\ DVXVXDO 8VH RI)RUHQVLF3V\FKRORJ\ GHWHFWVWKDW WKH YLFWLP LV QRW VXIIHULQJ IURP FRQYHQWLRQDOPHQWDO LOOQHVV EXW IURP VRPH VRUW RI H[DJJHUDWHGWUDXPDWRWKHSV\FKHVXFKDVLVIRXQGLQWKRVHZKRKDYHEHHQGUXJJHGDQGWRUWXUHGE\SURIHVVLRQDOV

,IWKHYLFWLPHQGVXSZLWK6WDELOLW\RUOHVVWKHQVKHZLWKGUDZVLQWRKHUVHOI6KHQHLWKHUVSHDNVQRUQRWLFHVKHUVXUURXQGLQJVEXWVSHQGVWKHUHVWRIKHUOLIHURFNLQJEDFN DQG IRUWK ,W LV SRVVLEOH WKRXJK PXFK PRUHGLIFXOW WRKHDO WKLVFRQGLWLRQ6KULQN WHVWV WR WUHDW LWDUHPDGHDJDLQVWDGLIFXOW\RIUDWKHUWKDQ

$OO7KDW5HPDLQV

7KH EORVVRPHU ULWXDO FDQ SURYLGH DQLQYHVWLJDWLRQWHDPZLWKKRXUVRIJULVO\ZRUN

(YLGHQFH&ROOHFWLRQ7KHPRVWHYLGHQFHULFKORFDWLRQLVDOZD\VWKHDOWDURQZKLFKWKHEORVVRPHULVLQLWLDOO\SDUWO\ GHYRXUHG %RQH PXVFOH DQG VNLQ DUH HDWHQEXW VRPH EORRG LQHYLWDEO\ HVFDSHV DQG LV IRXQGVSDWWHULQJ WKH JURXQG EHQHDWK PLQJOHG ZLWK VDOLYD,I DQ XQFRQWDPLQDWHG VDOLYD VDPSOH LV IRXQG LW PD\EH SRVVLEOH WR LGHQWLI\ WKH VRXUFHV EORRG W\SH LI WKDWSHUVRQZDVD VHFUHWRU RQHRI WKH URXJKO\RQHLQIRXUSHRSOH ZKR VHFUHWH WLQ\ DPRXQWV RI EORRG LQWR WKHLUVDOLYD

)RUHQVLF $QWKURSRORJ\ 7KLV DELOLW\ HVWDEOLVKHV WKHFDXVH RI WKH EORVVRPHUV GHDWK DV EORRG ORVV ,I WKHULWXDOZDV LQWHUUXSWHG DQG WKH XQHDWHQ FDUFDVV RI WKHEORVVRPHUUHFRYHUHGWKHWLVVXHVGHJHQHUDWHDWURXJKO\YHWLPHVWKHXVXDOUDWHDVLIWKH\ZHUHEHLQJGLJHVWHGIURP ZLWKLQ ,I WKH SORW UHTXLUHV LW WKLV DELOLW\ FDQDOVR UHYHDO FKDUDFWHULVWLF ELWH PDUN SDWWHUQV ZKHUHWKH WLVVXHV KDYH EHHQ HDWHQ DZD\ ZKLFK FDQ KHOS WRFRQUPWKHLGHQWLW\RIFXOWPHPEHUV

,Q WKH HYHQW RI DQ LQWHUUXSWHG ULWXDO VRPH RI WKHWUDXPDWL]HG FXOW PHPEHUV ZLOO YRPLW XS XQGLJHVWHGEORVVRPHU HVK DQVZHULQJ WKH TXHVWLRQ RI ZKDWKDSSHQHGWRWKHRWKHUKDOIRI WKHFRUSVHVERG\ 7KLVHVK GLVLQWHJUDWHV UDSLGO\ DV GRHV WKH UHVW RI WKHFRUSVH

3DWKRORJ\ ([DPLQDWLRQ RI WKH H[SHFWDQW PRWKHUUHYHDOV DEQRUPDOO\ KLJK ZKLWH EORRG FHOO FRXQW DQGKLJK WHPSHUDWXUH DV LI WKH ERG\ZHUH WU\LQJ WR JKWRII DQ LQIHFWLRQ +RZHYHU WKHPRWKHU DSSHDUV WR EHLQ SHUIHFW SK\VLFDO KHDOWK RWKHUZLVH ,I VDPSOHV RIXWHULQHXLGDUH WDNHQGXULQJ WKHUVW WULPHVWHU WKH\VKRZ IUHQ]LHG DFWLYLW\ E\ XQLGHQWLDEOH FHOOV ZKLFKGLVDSSHDUFRPSOHWHO\ODWHULQWKHSUHJQDQF\

,QWHUURJDWLRQ5HDVVXUDQFH,IRQHRIWKHPHPEHUVRIDEORVVRPHUFXOWLVFRQGHQWWKDWVKHKDVSOD\HGKHUSDUWWRWKHIXOODQGWKDWVKHZLOOEHUHZDUGHGVKHPD\FRPSO\IXOO\ ZLWK DQ LQWHUURJDWLRQ RU D PRUH FRQVLGHUDWHLQWHUYLHZ XQGHU WKH EDQQHU RI 5HDVVXUDQFH SXUHO\WRJORDWDQGWRUPHQW WKH OLVWHQHUV 6KHZLOOKRZHYHURQO\SHUVLVWLQWKLVLIWKHOLVWHQHUVVHHPGLVJXVWHGRUKRUULHG,IWKH\UHFHLYHWKHLQIRUPDWLRQSDVVLYHO\VKH ZLOO FODP XS DJDLQ 7KLV EHKDYLRU QDWXUDOO\

OHDGV VRPH WR EHOLHYHWKDW WKH ZKROH DFFRXQWLVDIDEULFDWLRQLQWHQGHGWR

VKRFN 6HH WKHSROLFH WUDQVFULSWDERYH IRUDQH[DPSOHRIVXFKDQLQWHUURJDWLRQ

'HPRQLF6HUYDQWV7KHRIIVSULQJRIDEORVVRPHUUHVHPEOHRUGLQDU\KXPDQFKLOGUHQDWUVWEXWWKHLUUDWHRIJURZWKDQGGHYHORSPHQWLVVWDJJHULQJO\JUHDWHU7KH\DJHDWDUDWHRIYH\HDUVIRUHYHU\\HDUWKDWSDVVHVJDLQLQJNQRZOHGJHDQGLQVLJKWZKHWKHUWKH\KDYHEHHQIRUPDOO\HGXFDWHGRUQRW7KHLUVXEWOH FRQQHFWLRQV WR WKH GHPRQLF UHDOPV JUDQW WKHPLQWHOOLJHQFHWKDWKXPDQFKLOGUHQKDYHWRHDUQ

,Q IRXU \HDUVZKHQ WKH\ DUH DSSDUHQWO\ WZHQW\ WKH\EHJLQ WR DJH QRUPDOO\ 7KH\ DUH XVXDOO\ EODFNKDLUHGDQGJUHHQH\HGZLWKDWDOHQWIRUVDGLVPWKDWSXWVWKDWRIQRUPDO FKLOGUHQ WR VKDPH WKH\ZLOOKDSSLO\SXOO DEHJJDUWRSLHFHVWRQGRXWKRZKHZRUNVRUGURZQDSOD\PDWH IRU IXQ$V WKHGHPRQLFFKLOGUHQFDQDWWUDFWXQZHOFRPH DWWHQWLRQ E\ JURZLQJ XS VR TXLFNO\ WKH\DUHXVXDOO\NHSW LQ WKHFXOWVSURWHFWLRQXQWLO WKH\DUHRIDJH

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

,IDFKDUDFWHUUHFRJQL]HVWKHGHPRQFKLOGVWUXHQDWXUHZKLOHKH LV LQ LWVSUHVHQFH RU HQFRXQWHUV WKHGHPRQFKLOGDWDODWHUVWDJHRQFHKHLVDZDUHRILWVQDWXUHKHPXVWPDNH D IRXUSRLQW6WDELOLW\ WHVW DV DSSURSULDWHIRUPHHWLQJDVXSHUQDWXUDOFUHDWXUH

,QWHUUXSWLQJWKH5LWXDO

7KHEORVVRPHUULWXDOLVKRUULFDQGSURWUDFWHGDQGLWVUHVXOWVDUHE\QRPHDQVFHUWDLQWKHVDFULFHPLJKWGLHSUHPDWXUHO\ RU WKH FRQJUHJDWLRQPLJKW LQDGYHUWHQWO\WRXFK KLV ERG\ZLWK VRPHWKLQJ RWKHU WKDQ WKHLU RZQQDNHG ERGLHV %RWK RI WKHVH FLUFXPVWDQFHV WHUPLQDWHWKHULWXDOLPPHGLDWHO\DQGZLQWKHFXOWWKHLUSDWURQVGLVDSSURYDODWWKHYHU\OHDVWWKH\PXVWZRUNORQJDQGKDUGWRHDUQDQRWKHUFKDQFHWRKRVWDEORVVRPHU

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

,IWKHDWWDFNLVVXFFHVVIXODQGWKHULWXDOIDLOVWKHFXOWLVWVPXVW PDNH SRLQW 6WDELOLW\ WHVWV WR DYRLG LQWHQVHSV\FKRORJLFDO DQG SV\FKLF WUDXPD WKLV KDV WKH VDPHLQJDPHHIIHFWVDV,PSUHJQDWLRQ0DGQHVVDERYHWKH\KDYHIDLOHGWKHLUSDWURQZKRLVUR\DOO\GLVSOHDVHGZLWKWKHP 7KH XQHDWHQ UHPDLQV RI WKH EORVVRPHU SXWUHI\YHWLPHVPRUHTXLFNO\WKDQWKH\VKRXOGDQGVKRZDQREYLRXVFDXVHRIGHDWKEORRGORVV

6KRXOG D FXOWLVW PLVFDUU\ ZKLFK FDQ RQO\ KDSSHQIROORZLQJ D GLVUXSWHG ULWXDO WKH IHWXV ORRNV VWUDQJHDQGOXPS\VHHWKH'HPRQ)HWXVLQD-DULQWKHDUWLIDFWVVHFWLRQ

$Q\FKLOGUHQERUQWRPRWKHUVZKRIDLOHGWRHDWSDUWRIWKHEORVVRPHUDUHKXPDQEXWVHHPVOLJKWO\RGG7KH\KDYHRGGO\FKDULVPDWLFSHUVRQDOLWLHVDQGWHQGWRGUDZRWKHUV WR WKHP )RUHQVLF 3V\FKRORJ\ GHWHFWV VLJQVRI PHJDORPDQLD IRUPHG IURP GHHSURRWHG GHOXVLRQVRI JUDQGHXU DV LI WKH FKLOG KDG D SURIRXQG VHQVH RIGHVWLQ\

&/227,(

7KH%RRNRI8QUHPLWWLQJ+RUURU

7KH&OLFNHW\0DQE\5RZDQ0DF.HQ]LHDJHG

:KHUH , XVHG WR OLYH LW ZDV YHU\ ROG $OO WKH KRXVHVZHUHROG7KHUHZDVQRVFKRRORQO\DFKXUFK:HXVHGWRKDYHOHVVRQVLQWKHFKXUFKDQG0UV:LOVRQGLGWKHOHVVRQV:HXVHGWRSOD\LQWKHVWUHHWEXWZHZHUHQRWDOORZHGWRZKHQLWZDVGDUN:KHQLWZDVGDUN\RXKDGWR JR DQG VD\ \RXU SUD\HUV DQG FORVH \RXU H\HV YHU\YHU\WLJKWDQGWKHQJRVWUDLJKWRIIWRVOHHS

,FDQQRWVOHHS,KLGHP\IDFH

)URPVXUIDQGVZHOODQGEORZ

6LQFH,KDYHVHHQWKHTXHHUJUD\PHQ

7KDWQLJKWO\FRPHDQGJR

7KHYLOODJHVTXDWVLQVRGGHQGXVN

:LWKVHDPLVWGUDSHGDQGGUHDU

$QGD\HWKHZDYHVDQGD\HWKHZDYHV

&RPHUXVKLQJIDUDQGQHDU

:KHQHYHU\GRRULVORFNHGDQGEDUUHG

$QGHYHU\FXUWDLQGUDZQ

~7LVWKHQWKH\FRPHXQVHHQEXWKHDUG

)RUVRRN)RUJRW)RUORUQ

7KHROGNQRZEHWWHUWKDQWRORRN

7KH\RXQJDUHIDVWDEHG

%XW,ZLWKORQHO\F\QLFVSULGH

$QGVFLHQFHLQP\KHDG

,ORRNHG,VKDOOQRWORRNDJDLQ

)RU\HW,VHHWKHPSDVV

7KHKROORZIDFHVRIWKHGURZQHG

,QPLVWEH\RQGWKHJODVV

)UDJPHQW RI YHUVH E\ $ 3 0RUWRQ%OXQNHWWGLVFRYHUHGZLWKKLVERG\7KH SRHW KDQJHG KLPVHOI LQ WKH URRPKH ZDV UHQWLQJ ZLWK D IDPLO\ RQ WKH6FRWWLVK LVODQG RI ,VOD\ ZKHUH KH KDGJRQHWRVHHNLQVSLUDWLRQ

*DPH6WDWLVWLFV$WKOHWLFV

+HDOWK6FXILQJ

+LW7KUHVKROG

6WHDOWK0RGLHUYHU\TXLHWPRYHPHQW

:HDSRQ+RRNV

$UPRUYV6FXILQJYV6KRRWLQJ

:KDW7KH\$UH&ORRWLHV VRPHWLPHV UHIHUUHG WR DV $XOG&ORRWLH DUHDQFLHQW ZDWHU VSLULWV WKDW H[LVW RQ WKH LVODQGV RII WKHZHVW FRDVW RI 6FRWODQG 7KH ORFDOV EHOLHYH WKHP WR EHWKH ZDQGHULQJ VRXOV RI GHDG VDLORUV ZKR KDYH GLHGFHQWXULHVDJR7KH LVODQGYLOODJHUV UHVSHFW WKHFORRWLHVEXW IHDU WKHP VRGLVVXDGH WRXULVWV IURPYLVLWLQJ WKHLUUHJLRQ

'XULQJ WKH GD\OLJKW KRXUV DQG DOO WKURXJK WKHVXPPHUWLPHWKHFORRWLHVDUHQRWVHHQWKHUHLVDOZD\VVRPHRQHZKRZLOOZRQGHUZKHWKHUWKH\ZLOOVWD\DZD\IRUJRRGWKLVWLPH,QHYLWDEO\LQWKHGDUNPRQWKVRIWKH\HDU WKH FORRWLHVGUDJ WKHPVHOYHVRXW IURP WKH VHDDWQLJKWDQGZDQGHULQWRWKHYLOODJH7KHUHDVRQIRUWKHVHQRFWXUQDOYLVLWDWLRQVFDQRQO\HYHUJXHVVHGDW3HUKDSVWKH\VLPSO\ZDQWWRZLWQHVVWKHZD\VRIWKHOLYLQJDQGUHPHPEHUZKDWWKH\KDYHORVW

7KH FORRWLHV QHYHU SK\VLFDOO\ LQWHUDFW ZLWK WKHHQYLURQPHQWV WKH\ YLVLW ,QVWHDG WKH\ ORRN OLVWHQUHPHPEHU DQG WKHQ JR EDFN LQWR WKH VHD 7KHVHYLVLWDWLRQV DUH QRQHWKHOHVV WHUULI\LQJ $FFRUGLQJ WROHJHQG RQH PXVW QHYHU ORRN XSRQ DQ DSSURDFKLQJFORRWLH RU HOVH LW ZLOO VWHDO DZD\ WKH VRXO DQG GUDJ LWGRZQLQWRWKHVHDIRUHYHU

7KHVHFUHDWXUHVKDYHYRLFHVOLNHWKRVHRIROGPHQDQGPDNH ORZGUDZQRXW VRUURZIXOPRDQVZKHUHYHU WKH\JR$OWKRXJKWKH\DUHZURQJO\EHOLHYHGWREHWKHVRXOVRIGHDGPHQWKHVHPRQVWHUVDUHIH\QRWXQGHDG

'HVSLWH WKH WHUULI\LQJ QDWXUH RI FORRWLHV WKH ROGHUPHPEHUV RI WKH YLOODJH FRPPXQLW\ NQRZ WKDW WKHLUYLVLWV DUH MXVW SDUW RI WKH ZD\ WKLQJV DUH DQG ZLOOUHVHQWDQ\DWWHPSWWRGRDZD\ZLWKWKHP$QJHULQJWKHFUHDWXUHVFDQEULQJJULPUHWULEXWLRQ7KHVHDKDV

FODLPHG PRUH WKDQ RQHYLOODJH RYHUQLJKW ZLWKPRQVWURXV ZDYHV RRGLQJ

LQODQG DQG GURZQLQJ WKH VHWWOHPHQWIRUHYHU /HJHQGV WHOO WKDW WKH FKXUFK EHOOVRI VXQNHQ YLOODJHV FDQ VWLOO EH KHDUG ULQJLQJ

XQGHUWKHZDWHU

%RZHO5DNH&ORRWLHVFDQXVHWKHLUKRRNVWRULSJULVO\WUHQFKHV LQ YLFWLPV ERGLHV $ FORRWLH FDQ VSHQG WZRSRLQWVRI6FXILQJEHIRUHDQDWWDFNLVPDGHWRGHDOWZRDGGLWLRQDO SRLQWV RI+HDOWK GDPDJH LQ WKH HYHQW RI DVXFFHVVIXOKLW

5HQG$UPRU$FORRWLHFDQDOVRXVHLWVKRRNVWRVKUHGDUPRU ,W GRHV WKLV DIWHU D KLW LV ODQGHG DQGGDPDJHUROOHG ,WPD\ VDFULFH RQH SRLQW RI GDPDJHGHDOW LQRUGHUWRUHPRYHRQHSRLQWRIDUPRUSURWHFWLRQIURPWKHWDUJHW$UPRUZLWKQRSURWHFWLRQOHIWLVGHVWUR\HG

'LVFRUSRUDWLRQ 3K\VLFDO GDPDJH FDQQRW GHVWUR\ DFORRWLH5HGXFLQJLWV+HDOWKWR]HURFDXVHVLWWRFROODSVHLQWRDJXVKRIVDOWZDWHUZKLFKWKHQWULFNOHVDZD\EDFNWRVHD7KHFORRWLHFDQWKHQPDQLIHVWDJDLQRQDQRWKHUQLJKW

7KHRQO\ZD\WRULGDUHJLRQRIFORRWLHVLVWRGHSRSXODWHLW6RPHYLOODJHVZKHUHWKH\XVHGWRZDONLQ\HDUVSDVWKDYHVLPSO\GLHGRXWDQGWXUQHGLQWRJKRVWWRZQVDVWKHSHRSOHKDYHPLJUDWHGDZD\7KHFORRWLHVQRORQJHUZDQGHU WKHVH VWUHHWV DV WKHUH LV QRWKLQJ IRU WKHP WRORRNDWDQGUHPHPEHU2IFRXUVHVKRXOGSHRSOHPRYHEDFNWKHFUHDWXUHVPLJKWYHU\ZHOOUHWXUQ

3&V PLJKW ZDQW WR WU\ WR H[SHO WKH PRQVWHUV XVLQJZKDWHYHUSDVVHVIRUSRZHUIXOPDJLFRUUHOLJLRXVIDLWKLQWKH*0VFDPSDLJQZRUOG7KLVPLJKWYHU\ZHOOZRUNGHSHQGLQJ LRQ WKH*0VZKLPV DOWKRXJK WKHUH LV RIFRXUVHQRZD\WRNQRZZKHWKHUVXFKDQDFWKDVEHHQHIIHFWLYH

'UHDGIXO*D]H7KHFORRWLHVHPSW\H\HGJD]HOOVDQ\SHUVRQZKRVHHVLWZLWKGHHSWHUURUDVLIIUHH]LQJRFHDQFXUUHQWVZHUHPRYLQJ WKURXJKKLVERQHV 7KHFORRWLHPD\RSWWRVWDUHDWDFKDUDFWHULQVWHDGRIDWWDFNLQJ$Q\SHUVRQ VR VWDUHGDWPXVW LPPHGLDWHO\PDNHDSRLQW6WDELOLW\WHVW7KLVWHVWPXVWEHPDGHDIUHVKRQHYHU\RFFDVLRQRQZKLFKWKHFORRWLHXVHVLWVJD]H&KDUDFWHUVZKRDFTXLUHPHQWDOLOOQHVVHVDVDUHVXOWRIWKLV6WDELOLW\ORVVXVXDOO\EHFRPHK\GURSKRELFZLWKDSDUWLFXODUIHDURIWKHVHD

7KHFORRWLHFDQWHOOZKHQDSHUVRQLVDYHUWLQJKLVJD]H,WZLOOQRWPROHVWDQ\RQHZKRGRHVVRQHLWKHUZLWKLWVJD]HQRUZLWKLWVKRRNV7KHUHLVQRULVNRIDQDFFLGHQWDOJD]H DWWDFN KDSSHQLQJ LI D SHUVRQ LV GHOLEHUDWHO\UHIXVLQJWRORRN6RORQJDVDSHUVRQGRHVQRWORRNDWWKHFORRWLH LWZLOOQRWGRDQ\WKLQJWRKDUPKLPHYHQLI LWFRPHVFORVHHQRXJKWREUXVKDJDLQVWKLP

)HDUIXO +RZO :KHQ WKH FORRWLHV UDLVH WKHLU YRLFHVDQGKRZODWKULOORISXUHIHDUJRHVWKURXJKWKRVHZKRKHDUWKHVRXQG7KHLUVWUHQJWKRRGVRXWRI WKHPOLNHZDWHU $OO WKRVHZKR KHDU WKH QRLVHPXVWPDNH D SRLQW6WDELOLW\WHVW,IWKH\IDLOWKH\DOVRORVHDSRLQWRI+HDOWKWKURXJKXQFDQQ\SK\VLFDOH[KDXVWLRQ&ORRWLHVXVXDOO\RQO\KRZORQFHSHUQLJKWZKHQWKH\UVWFRPHXSRXWRIWKHVHDDQGWUXGJHXSWKHEHDFK

6SLULW*RXJH7KHFORRWLHFDQFKRRVHWRUDNHWKHYLFWLPVVSLULW LQVWHDGRIKLV ERG\ LI LWZLVKHV ,Q WKLV FDVH WKHKRRNV WHDUDZD\VKUHGVRI WKHYLFWLPVYHU\ OLIH IRUFH7KH\LQLFWQR+HDOWKGDPDJHEXWHYHU\KLWVKUHGVWKHWDUJHWVSV\FKHGHDOLQJGDPDJHWR6WDELOLW\H[DFWO\DVLILWKDGEHHQ+HDOWK7KHKRRNEORZVOHDYHUHGZHDOVZKHQWKH\JRXJHWKHVSLULWZKLFKORRNIHDUVRPHEXWGRQRSK\VLFDOGDPDJH

7KH FORRWLH FDQ UHFRYHU RQH ORVW SRLQW RI+HDOWK IRUHYHU\SRLQWRI6WDELOLW\LWVKUHGV

6WDELOLW\ORVWWRWKHFORRWLHV6SLULW*RXJHDWWDFNFDQQRWEHUHFRYHUHGZLWKWKH6KULQNDELOLW\,WFDQKRZHYHUEHUHJDLQHGQDWXUDOO\RYHUWLPHE\UHFRXUVHWRVRXUFHVRI VWDELOLW\ VHH WKH6WDELOLW\ UXOHV LQ(VRWHUURULVWV DQG)HDU,WVHOIVRORQJDVWKHYLFWLPKDVDFFHVVWRKLVVRXUFHVRIVWDELOLW\

&KDUDFWHUVZKRGURSEHORZ]HUR6WDELOLW\ IURP WKHVHDWWDFNV ODSVH LQWR D GHHS DQG SHUPDQHQW FRPD DVGHVFULEHGDERYH7KH\FDQQRWEHURXVHGIURPWKLVFRPDE\DQ\QRUPDOPHDQV,QJDPHWHUPVWKHFKDUDFWHULVDVORVWDVLIKHKDGJRQHSHUPDQHQWO\LQVDQH

&/227,(

7KH JXDUGZDV QHUYRXV DQGZDQWHG WR OHDYH +H FUDGOHGKLV PDFKLQH SLVWRO LQ VZHDW\KDQGV +HG DOZD\V UHJDUGHG

KLPVHOIDVDKDUGPDQEXWWKHVPHOORISDLQWDQGOWKZDVPDNLQJKLP IHHO

VLFNWKHSULVRQHUKDGEHHQWRUWXUHGHDUOLHULQWKHDIWHUQRRQDQGKDGIRXOHGKLPVHOI

7KHPDQ LQ WKHVXLWZDVVOHHNXQWDQGZHOO IHG+HZDV VHOIFRQVFLRXVO\ IXVVLO\ VW\OLVK HYHQ LQGRRUV KHDIIHFWHGDSDLURIPLUURUHGDYLDWRUVKDGHV+HVPRNHG*LWDQHVDQGFDUULHGDKHDY\FDQH7KHPDQLQ IURQWRIKLPZDV VSUDZOHG FURRNHGO\ DV LI KLV DUPV DQG OHJVKDGEHHQSXWLQWKHZURQJZD\

3HRSOHLQ\RXUYLOODJHDUHPDNLQJWURXEOHIRUXV7KH\VD\\RXKDYHVSRNHQWRWKHPRIFXUVHV7KH\VD\WKDW\RXKDYHWROGWKHPWRNLOOWKH*RYHUQPHQWVROGLHUV,VWKLVWUXH"

7KHVNLQQ\ZUHWFKRQWKHPDWVDLGQRWKLQJ7KHPDQLQ WKHVXLWEHJDQ WRUHPRYHKLV MDFNHWDQG WLH IROGLQJWKHPIDVWLGLRXVO\+HKHOGWKHPRXWWRWKHJXDUGZKRPRPHQWDULO\DWDORVVVOXQJKLVZHDSRQDQGWRRNWKHFORWKHV7KH\VPHOOHGRIVZHDWDQGFRORJQH

'($7+7$33(5

'HDWK7DSSHU

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

7KHUHZHUHWKUHH$IULFDQPHQLQWKHKRWIXJ7ZRRQHLQDFUHDPOLQHQVXLWDQGRQHLQDVDQGXQLIRUPVWRRGRYHU WKH WKLUG WKH RQH LQ UDJV WKH RQH VWDLQHG ZLWKIHFHVXULQHPXFXVGURRODQGEORRGZKRKDGVOLWKHUHGRIIWKHFKDLUDQGVOXPSHGWRWKHRRU

7KH%RRNRI8QUHPLWWLQJ+RUURU

7KH\ ZDQW WKH ODQG DQG WKH\ VKDOO KDYH WKH ODQGVDLG WKH PDQ ZKR WKHDWULFDOO\ GUHZ D KHDY\ YLQ\ODSURQ IURP KLV FDVH DQG SXW LW RQ +H UROOHG XS KLVVKLUWVOHHYHV+HSLFNHGXSKLVFDQHDQGSDWWHGKLVSDOPZLWKWKHZHLJKWHGKDQGOH+HDGGUHVVHGKLPVHOIWRKLVSULVRQHU

7KHWUXFNVGLGQRWOHDYHWKHYLOODJHODGHQZLWKFDVVDYD7KHYLOODJHGLGQRWHDWZHOOEXWLWVSHRSOHKDGHQRXJK1RRQHDVNHGDQ\TXHVWLRQV7KHQHZJRYHUQRUZDVDVXSHUVWLWLRXVPDQDQGNQHZZKHQWROHDYHZHOOHQRXJKDORQH+HZDVDIUDLGDQGWKHSHRSOHUHVSHFWHGKLPIRULW

$OO7KDW5HPDLQV(YLGHQFH&ROOHFWLRQ'LVFRYHULQJWKHFRUSVHRIDSHUVRQZKRKDVGLHGIURP&KXUQLQJ5RWLVDOZD\VDVWRPDFKWXUQLQJHYHQW7KHUHLVDQRYHUSRZHULQJVWHQFKRIELOHIHFDOPDWWHUDQGEORRG7KHYLFWLPXVXDOO\SXUJHVKLVERZHOV VHYHUDO WLPHV LQ YDULRXV SODFHV EHIRUH QDOO\FROODSVLQJ 7KH H[SHOOHG ERGLO\ VXEVWDQFHV FRQWDLQ DGHFUHDVLQJOHYHORIVWRPDFKFRQWHQWVDQGDQLQFUHDVLQJOHYHO RI EORRG DQGGHWHULRUDWHG VWRPDFK OLQLQJ DV WKHYLFWLPVWDJJHUVWRZDUGVKLVQDOSRLQWRIGHDWK

)RUHQVLF $QWKURSRORJ\ 0XFK RI WKH YLVFHUD LQ DGLVLQWHJUDWHGVWDWHKDYHXVXDOO\EHHQH[SHOOHGIURPWKHPRXWK7KH\DUHLQDVHPLOLTXLGVWDWHZLWKWKHWRXJKHUWLVVXHVVRIWHQHGDQGWXUQHGLQWRD MHOO\OLNHVXEVWDQFH:LWKRXWWKLVOLTXHIDFWLRQLWZRXOGEHLPSRVVLEOHIRUWKHLQWHUQDORUJDQVWREHSURSHOOHGIURPWKHERG\DVWKH\DUHWRRODUJHWRSDVVWKURXJKWKHWKURDW

6HYHUDO IHHW RI SURODSVHG LQWHVWLQH W\SLFDOO\ SURWUXGHIURPWKHDQXV7KHVXEVWDQFHRIWKHLQWHVWLQHLVSHULVKHGDQGHDWHQDZD\DV LIE\DFLGGDPDJHQRW WRUQ ,Q WKHQHDU YLFLQLW\ KDYLQJ EHHQ H[SHOOHG DQDOO\ DUH WKHPDMRULW\RIWKHODUJHLQWHVWLQHDQGWKHVPDOOLQWHVWLQH,QVRPHFDVHVZKHQWKHYLFWLPKDVQRWEHHQGLVFRYHUHGIRUVRPHWLPHWKHVNLQLVDOVRSDUWO\OLTXHHGLQWKHVDPHPDQQHU WKDW WKH YLVFHUD DUH 2UJDQV WKDW KDYH EHHQSDUWLDOO\ OLTXHHG EHFRPH VHPLWUDQVSDUHQW LQFOXGLQJWKHVNLQ

)RUHQVLF (QWRPRORJ\ 7KH SRLQW DW ZKLFK WKH 'HDWK7DSSHUODWFKHGRQWRWKHYLFWLPLVDOZD\VREYLRXV,WLVFOHDUO\DSXQFWXUHPDUNRIVRPHNLQGDUDLVHGUHGGLVKFUDWHUDQLQFKDFURVVZLWKDVXSSXUDWLQJFRUH$VLWLVLQHYLWDEO\IRXQGDERYHDEORRGYHVVHODQHQWRPRORJLVWZLOOLGHQWLI\WKLVDWRQFHDVDQLQVHFWELWHUDWKHUWKDQDZRXQG IURPDEORZSLSHRUGDUWJXQ 7KH WLVVXHVDUHLQHYLWDEO\ WRR GHWHULRUDWHG WR HVWDEOLVK ZKDW VRUW RISURERVFLVFDXVHGWKHZRXQG

3DWKRORJ\0HGLFDOH[DPLQDWLRQRIDSHUVRQVXIIHULQJIURP&KXUQLQJ5RWJLYHVGLIIHUHQWUHVXOWVGHSHQGLQJRQKRZIDUDGYDQFHGWKHGLVHDVHLV,QWKHLQLWLDOYRPLWLQJVWDJH WKH YLFWLP H[KLELWV V\PSWRPV LQGLVWLQJXLVKDEOHIURP VHYHUH JDVWURHQWHULWLV 7KH ODWHU DSSHDUDQFH RIEORRG LQ WKHYRPLW DQG IHFHV DORQJZLWK VNLQ OLYLGLW\LQWKHORZHUDEGRPHQLQGLFDWHVLQWHUQDOKHPRUUKDJLQJ

WKLV VXJJHVWV HLWKHU WKDW DVKDUS REMHFW KDV ZRUNHG LWVZD\ LQWR WKH ERZHO RU WKDW WKH YLFWLP KDVVZDOORZHGDFRUURVLYHDJHQW

*DPH6WDWLVWLFV

$WKOHWLFV+HDOWK6FXILQJVSHFLDO

+LW7KUHVKROGWLQ\DQGDJLOH

$OHUWQHVV0RGLHU

6WHDOWK0RGLHUWLQ\

:HDSRQ6SHFLDO3URERVFLV

$UPRUYV6FXILQJ

7KLV PLQXWH FUHDWXUH UHVHPEOHV D EORDWHG UHSXOVLYHHD,WLVLQIDFWDGHPRQFDSDEOHRILQMHFWLQJDGHDGO\DJHQWWKDWZLOONLOO LWVYLFWLPLQDPDWWHURIKRXUV7KHGHDWKWDSSHULVVRFDOOHGEHFDXVHRIWKHNQRFNLQJVRXQGWKDWFRPHVIURPLWVDEGRPHQ7KLVQRLVHLQGLFDWHVWKDWWKHGHPRQLVPDNLQJDGRVHRIWKHXLGWKDWDFWVDVDYHFWRUIRUWKHGLVHDVHDWWDFN

7KHGHDWKWDSSHUODQGVRQLWVYLFWLPDQGELWHVKLPWKXVLQIHFWLQJKLPZLWK DGLVHDVH NQRZQDV7KH&KXUQLQJ5RW &KXUQLQJ 5RW EHJLQV ZLWK YLROHQW GLDUUKHD DQGYRPLWLQJ 2QFH WKH YLFWLP VKHGV WKH FRQWHQWV RI LWVVWRPDFK DQG ERZHOV WKH YLUXV VWDUWV WR OLTXHI\ KLVRUJDQV7KHYLFWLPVGLHVFRQVFLRXVDQG LQKRUUHQGRXVSDLQDVKHYRPLWVDQGH[FUHWHVKLVRZQLQQDUGV

7KH GHDWK WDSSHU LV PRVW FRPPRQO\ IRXQG LQ WKHGHYHORSLQJZRUOGZKHUHLWVJUHDWHVWHQHP\LPPHGLDWHVXUJLFDO LQWHUYHQWLRQ LV XQOLNHO\ )RUWXQDWHO\ WKHVHGHPRQVDUHUDUH&HUWDLQWUDIFNHUVLQGDUNPDJLFNQRZRI WKHP DQG UHVSHFW WKHP ,W LV VRPHWLPHV SRVVLEOHIRU D GHDWK WDSSHU WR EH VHQW RQ DQ HUUDQG VR WKDW LWFDQ LQIHFW VRPHERG\ ZKR QHHGV WR EH JRWWHQ ULG RIDOWKRXJK LQ JHQHUDO WKH\ VSUHDG WKHLU JULVO\ SODJXHLQGLVFULPLQDWHO\ VR WKDW LW VHHPV WR VWULNH FRPSOHWHO\DWUDQGRP

$JLOH 'HDWK7DSSHUVPRYHZLWK LQFUHGLEOHVZLIWQHVVRQWKHLUPDQ\OHJVDQGDUHQLJKLPSRVVLEOHWRKLW$WWKHVWDUWRIDQ\URXQGEHIRUHDQ\RQHKDVDFWHGWKH'HDWK7DSSHUPD\EXUQXS WR IRXUSRLQWV IURP LWV$WKOHWLFVSRRO7KHVHDUHWKHQDGGHGWRLWV+LW7KUHVKROGIRUWKHGXUDWLRQRIWKHURXQG

'($7+7$33(5

(OXVLYH'HDWK 7DSSHUVDUH KDUG WR VHH ,I WKHSORW UHTXLUHV WKH FUHDWXUHV

GLVFRYHU\ WKHQ (YLGHQFH &ROOHFWLRQ IRU(VRWHUURULVWV RU D GHFODUHG VHDUFK IRU )HDU,WVHOI UHYHDO LW 2WKHUZLVH DQ\ FKDUDFWHU LQ

WKH VDPH DUHD DV RQHPXVWPDNH D 6HQVH7URXEOH RU6XUYHLOODQFHWHVWWRQRWLFHLWPRYLQJDERXW$FKDUDFWHUZKRIDLOVWKLVWHVWFDQQRWVHHWKH'HDWK7DSSHUXQOHVVLWLVSRLQWHGRXWWRKLP'HWHFWHG'HDWK7DSSHUVUHPDLQGHWHFWHGXQOHVVDQGXQWLOWKH\XVHWKHLU-XPS7R&RYHUDELOLW\IRUZKLFKVHHEHORZ

&OLQJ'HDWK7DSSHUV MXPSDQG FOLQJ WR WKHLUYLFWLPVEHIRUH WKH\ ELWH $ 'HDWK 7DSSHU WKDW VXFFHVVIXOO\KLWV IROORZLQJ LWV 6FXILQJ WHVW LV JULSSLQJ RQ WR LWVLQWHQGHG YLFWLP DQG DXWRPDWLFDOO\ ELWHV RQ WKH QH[WURXQGXQOHVVUHPRYHG7KHYLFWLPPD\SXOORUEUXVKWKH7DSSHURIIE\HQJDJLQJLQDVXFFHVVIXODWWDFNDJDLQVWLW

'LVHDVH 7KH 7DSSHUV ELWH GRHV QRW GHDO GDPDJH LQLWVHOILWLVWRRVPDOO+RZHYHUWKHLPSDFWRIWKHGLVHDVHRQWKHYLFWLPVV\VWHPLVLPPHGLDWHDQGRYHUZKHOPLQJ:KHQ ELWWHQ WKH YLFWLP PXVW LPPHGLDWHO\ PDNH D+HDOWK WHVWZLWK D GLIFXOW\ RI WKLV UHSUHVHQWV KLVERG\V DWWHPSW WR JKW RII WKH LQLWLDO LQIHFWLRQ +H LVDOORZHG WR VSHQGSRLQWVRI+HDOWK WRGR WKLV DV LIKHZHUH PDNLQJ D+HDOWK WHVW WR UHPDLQ FRQVFLRXV $SHUVRQ ELWWHQ E\ D 'HDWK 7DSSHU FDQ WKXV EHFRPHH[KDXVWHG DQG XQVWHDG\ RU HYHQ XQFRQVFLRXV EXWUHPDLQIUHHIURPWKHGLVHDVH

9LFWLPV ZKR IDLO LPPHGLDWHO\ EHFRPH LQIHFWHG ZLWK&KXUQLQJ5RW7KLVGLVHDVHLVVXSHUQDWXUDOLQRULJLQDQGFDQQRWEHWUHDWHGZLWKDQWLELRWLFVRUVHUXPV

$ SHUVRQ VXIIHULQJ IURP &KXUQLQJ 5RW PXVW PDNH D+HDOWK WHVW DJDLQVW DGLIFXOW\RI HYHU\PLQXWHV$JDLQKH LVDOORZHGWRH[SHQG+HDOWKSRLQWV WRVWD\DOLYH HYHQ WR WKH SRLQW RI SXVKLQJ KLPVHOI EHORZ]HUR+HDOWK 6XFFHVV VLPSO\PHDQV WKDW QR GDPDJHLV VXIIHUHG WKLV WLPH IDLOXUH GHDOV SRLQWV RI+HDOWKGDPDJH

7KHRQO\ZD\WRWUHDW&KXUQLQJ5RWLVWRSHUIRUPPDMRUVXUJHU\DQGUHPRYHDQ\SDUWVRIWKHLQWHUQDORUJDQVWKDWKDYHDOUHDG\EHFRPHLQIHFWHG7KLVLQLWVHOIFDQNLOOWKHVXIIHUHU7UHDWLQJ&KXUQLQJ5RWZLWKVXUJHU\UHTXLUHVWKUHH VXFFHVVIXO FRQVHFXWLYH 0HGLF WHVWV DJDLQVW DGLIFXOW\RI PDGHDFURVV DSHULRGRI PLQXWHV DVZHOODVDFFHVVWRDSSURSULDWHVXUJLFDOHTXLSPHQW

7KHUHPRYDORIWKHLQWHUQDORUJDQVLQLFWVSRLQWVRISHUPDQHQWGDPDJHWRWKHYLFWLPV+HDOWKUDWLQJHYHQLIWKH0HGLFWHVWVDUHVXFFHVVIXO

2QFH WKHGHDWK WDSSHUKDV LQIHFWHG DYLFWLP LW KDV WRVHFUHWHDQRWKHUGRVHRIXLGEHIRUHLWFDQPDNHDQRWKHUGLVHDVH DWWDFN 7KHGHPRQPXVW SDXVH WR WDS EHIRUHLW FDQ LQIHFW DJDLQ $6HQVH 7URXEOH RU6XUYHLOODQFHWHVW GLIFXOW\DOORZVD OLVWHQHU WRKHDU WKHFUHDWXUHWDSSLQJDQGZRUNRXWLWVDSSUR[LPDWHORFDWLRQ:KLOHWKH FUHDWXUH LV WDSSLQJ LW GRHV QRW EHQHW IURP LWV6WHDOWK0RGLHU

-XPS WR &RYHU $ GHDWK WDSSHU FDQ VSULQJ RQ LWVSRZHUIXO OHJV PRYLQJ IURP RQH KLGLQJ SODFH WRDQRWKHU,ILWKDVEHHQGHWHFWHGLWFDQDWWHPSWWRVSULQJEDFN XQGHU FRYHU E\ PDNLQJ DQ $WKOHWLFV FRQWHVWRSSRVHGE\WKH6HQVH7URXEOHRU6XUYHLOODQFHDELOLW\RIWKHFKDUDFWHUFORVHVWWRZKHUHLWODQGV,ILWRSWVWRGRWKLVLWFDQQRWDWWDFNWKDWURXQG

'(0(17,$/$59$7KH7UDQVIRUPDWLRQRI-XOLD%URZQH

WK0DUFK

7RGD\VKHJRWDSRVWFDUGLQWKHPDLOIURP.RUHQVN\WKHSULYDWHLQYHVWLJDWRU+HKDGDGGUHVVHGLWWR3ULQFHVV+HZDV KDYLQJ D NLFNDVV WLPH LQ .LQJVWRQ VXQQLQJKLV VFDUUHGHVK DQGKRSHG VKHZDVGRLQJZHOO7KHPHVVDJHGLGQRWKDYHDQ\RIKLVXVXDOLUWDWLRXVEDQWHULQLW

6KH VWXFN LW WR WKH ZDOO DERYH WKH IULGJH .RUHQVN\ZDV D JRRGPDQ SUREDEO\ WKH RQO\ WUXO\ GHFHQW RQHRIWKHJURXS6KHZLVKHGKHKDGEHHQDEHWWHURQH6KHVZDOORZHGKHUPHGLFDWLRQ

$WOHDVWKHZURWH7KHRWKHUVGLGQRW6KHRQO\NQHZIURPQHZVSDSHUUHSRUWVWKDWWKH3URIHVVRUKDGH[KLELWHGWKHDUWLIDFWVIURP&DLURDQGYLQGLFDWHGKLPVHOIFRPSOHWHO\QRERG\ZRXOGFDOOKLPDTXDFNDJDLQ7KHUHZDVHYHQWDONRID%DO]DQ3UL]H0DUFRZDVEDFNRQWKHERDWVDQGEDFNRQ WKHERR]HE\QRZ&RQQLHZHOO VKHZRXOGEHPDUULHG DJDLQ E\ QRZ WR VRPH OHDWKHU\PDJQDWH0DUU\LQJ ZDV ZKDW &RQQLH GLG +HU DOORZDQFH KDGIXQGHGPRVWRIWKH&DLURH[SHGLWLRQ

6KHKDWHGWKHPDOO

7KH%RRNRI8QUHPLWWLQJ+RUURU

/HWWHUVZHUH SLOHG RQ WKHPDW$ IHZPRUH KDG EHHQVWXIIHGLQWRWKHOHWWHUER[DQGKDGZHGJHGWKHUH

,WKDGDOOEHHQDOLH7KH\KDGQHYHUEHHQDWHDP7KH\ZHUH QRW LQYHVWLJDWRUV RU HYHQ KHURHV 7KH\ ZHUHMXVW JUHHG\ SHRSOH ERXQG WRJHWKHU E\ FRPPRQ QHHG&RQQLH ZDQWHG H[FLWHPHQW WKH 3URIHVVRU OXVWHG DIWHULQIRUPDWLRQ .RUHQVN\ QHHGHG WR QG RXW ZKDW KDGKDSSHQHGWRKLVIULHQG0DUFRKDGWREHWKHELJVWURQJSURWHFWRU$VIRUKHUVKHKDGZDQWHGWKHVWRU\

,QKHUVWRULHVVKHZURWHDERXWGLVDVWHUVDQGKRZWKH\FKDQJHGSHRSOH6KHZURWHDERXWWKHRFHDQOLQHUVWKDWEURNHDSDUWDQGWKHDLUVKLSVNHOHWRQVIDOOLQJLQDVORZKRORFDXVWRIUH6KHZDV ORRNLQJ IRU VRPHWKLQJZLWKVXIIHULQJ LQ LW LQ &DLUR VRPHWKLQJ ZLWK WKH KXPDQDQJOH6XIIHULQJVHOOVSDSHUV

,WKDGDOOEHHQVRYHU\URPDQWLFDWUVWVRPXFKOLNHDSXOSQRYHO7UXH(J\SWKDG VWXQNDQGVKH FRXOGQRWEHDUWRORRNDWWKHOHSHUVEXWWKHKRWHOZDVPRGHUQFRRODQGSOXVK7KHH[SHGLWLRQZDVJRLQJWREHWKHFOLPD[RILW DOO 7KHPDSV WKH DQFLHQW WDOLVPDQV WKH FUXPEOLQJWH[WVLWZDVVXSSRVHGWREHDQDGYHQWXUH

6KHDWHUDZHJJVIURPWKHIULGJHRQHE\RQH7KHFROGVKHOOVEXUVWLQKHUPRXWKDTXDJRIVOLPH6KHFUXQFKHGWKHJULWDQGLPDJLQHGWKDWHDFKRQHZDVWKHVNXOORIRQHRIKHUIULHQGV

UG$SULO

,QDVSDVPRIUHPRUVHVKHVWXFN.RUHQVN\VSRVWFDUGEDFNDERYHWKHIULGJHXVLQJDSLHFHRIKHUWKXPEWKDWKDGFRPHRIIDVJOXH,WKHOGWKHUHIRUDPRPHQWWKHQVORZO\EHJDQWRVOLGHDQGIHOOXWWHULQJ

1XPEIURPWRRPDQ\SXQFKHVWRKHUPLQGVKHFULHG+RWVDOW\VQRWRZHGIURPWKHKROHVLQKHUIDFH

WK$SULO

,WZDVQRWVREDGQRZ1RZVKHFRXOGVHHLWDJDLQLQKHUPLQGLWZDVQRWVREDG

,WZDVFDOOLQJWRKHUFDOOLQJDFURVVWKHFROGVSDFHV7KHKHDYLQJJRJJOLQJWKLQJLQ&DLURZDVRQO\SDUWRILW

,Q&DLURVKHKDGZHWKHUVHOIDQGFXUOHGXSDQGFODZHGDW KHU VNLQ DQG VFUHDPHG DQG VFUHDPHG XQWLO WKHLQMHFWLRQVQDOO\FDPHDQGWKHVWURQJVWUDSVKHOGKHU WLJKW WR WKHEHG7KH3URIHVVRUKDG WZHDNHG

KLV \HOORZ PRXVWDFKH JUDYHO\ DQG WDONHG QRQVHQVHZKLOH0DUFRKHOGKHUKDQGDQGWROGKHUWKDWVKHZRXOGEHDOOULJKWWKDWWKH\ZHUHJRLQJKRPHWR1HZ

$OO7KDW5HPDLQV

(YLGHQFH &ROOHFWLRQ 7KH YLFWLPV RI GHPRQLF ODUYDHDUHVODWKHUHGZLWKDVOLP\UHVLGXHWLQWHGEURZQ7KLVUHVLGXH LVRIWHQ IRXQGRQRWKHU VXUIDFHV DQG VPHDUHGLQ VOXJOLNH WUDLOV DFURVV WKH RRU 6RPHWLPHV DQLQYHVWLJDWLRQZLOOQGFKHZHGRIIKDQGVDQGIHHWEDGO\GHWHULRUDWHG DV LI E\ JDQJUHQH 7KHVH DUH WKH ODUYDVRZQERG\SDUWVVKHGLQWKHSURFHVVRIWUDQVIRUPDWLRQVHHEHORZXQGHU3DWKRORJ\

)RUHQVLF $QWKURSRORJ\ 7KH YLFWLPV ERG\ W\SLFDOO\VKRZV VLJQV RI KDYLQJ EHHQ FUXVKHG WR GHDWK E\ DPXVFXODU FRLOLQJ DSSHQGDJH PXFK OLNH D FRQVWULFWRUVQDNH

2FFDVLRQDOO\ ERGLHV DUH GLVFRYHUHG GHFDSLWDWHG WKHKHDGZKLFKLVPLVVLQJDQGZKLFKQHYHUFRPHVWROLJKWKDYLQJEHHQVOLFHGRIIE\DVHWRIVKDUNOLNHLQFLVRUV7KHUHLVPXFKOHVVEORRGWKDQRQHZRXOGH[SHFW

/DUYDH GR QRW H[FUHWH DQ\WKLQJ PRUH VROLG WKDQVOLPH +RZHYHU WKH\ UHJXUJLWDWH ERQHV DQG VLPLODULQGLJHVWLEOH UHPDLQV VXFK DV PHWDO PXFK DV RZOVUHJXUJLWDWH SHOOHWV 7KH UHPDLQV RI D YLFWLP WKDW KDVEHHQ HDWHQ E\ D ODUYD DUH QDNHG ERQHV FRYHUHGZLWKVOLPHDQGVKRZLQJVLJQVRIFRUURVLRQ

&KHPLVWU\ &KHPLFDO DQDO\VLVRI WKH VOLP\ VXEVWDQFHIRXQGRQ WKHYLFWLPV VKRZV LW WR EH RUJDQLF LQ RULJLQDQGVLPLODUWRKXPDQVDOLYD 7KHEURZQFRORUUHVXOWVIURPDKXJHTXDQWLW\RIGHDGEORRGFHOOV

3DWKRORJ\ ,IDKXPDQZKR LVEHJLQQLQJ WR WUDQVIRUPLQWR D GHPHQWLD ODUYD LV HQFRXQWHUHG ZKLOH VWLOOUHFRJQL]DEO\ KXPDQ WKHQ VRPH VWULNLQJ IHDWXUHV FDQEHQRWHG7KHVNLQLVUHGGLVKDQGSHHOLQJVXJJHVWLQJVXQEXUQ RU SRVVLEO\ D QDVW\ IXQJDO LQIHFWLRQ 7KHHVKEHQHDWK LVSXII\HVSHFLDOO\DURXQGWKHQHFN WKHORFDWLRQRIWKHVZHOOLQJVLQGLFDWLQJLQDPPDWLRQRIWKHO\PSKQRGHV

7KH WRUVR LV W\SLFDOO\ FRYHUHG ZLWK EORRG EOLVWHUVEHWZHHQWKUHHDQGHLJKWLQFKHVDFURVVZKLFKDUHIUDJLOHDQG EXUVW HDVLO\ XQGHU JHQWOH SUHVVXUH 7KH H[SRVHGGHUPDO OD\HUV DUHZHW DQGSLQN DQGRR]H O\PSKEXWQRWEORRG

7KH YRLFH LV XVXDOO\ KRDUVH DW UVW DV LQ FDVHV RIODU\QJLWLV EXW EHFRPHV D UDWWOLQJ JXUJOH ODWHU LQ WKHSURFHVVOLNHWKHEXUURIDKHDY\VPRNHULQWKHPRUQLQJ6SHHFK LVKDUG WRXQGHUVWDQG DV WKHYLFWLPV VZROOHQWRQJXHPDNHVDUWLFXODWLRQLQFUHDVLQJO\GLIFXOW

7KH KDQGV DQG IHHW ZKLFK WKH YLFWLP ZLOO XVXDOO\FRYHUXS XVLQJKHDY\PLWWHQV IRU WKHKDQGVRU HYHQ

ER[LQJJORYHVLQRQHFDVHGHWHULRUDWH YHU\ VXGGHQO\7KH QDLOV IDOO RII FDXVLQJ QR SDLQ WR WKHYLFWLP7KHUHDIWHUWKHHVKEHFRPHVVSRQJ\DQGSLWWHGZLWKWLQ\KROHVOLNHHQODUJHGSRUHVZKLFKVWHDGLO\GHHSHQDQGZLGHQDFFRPSDQLHGE\DQXQEHDUDEOH LWFK 7KHYLFWLPZLOORIWHQ UHPRYHWKHVHQRZUHGXQGDQWH[WUHPLWLHVXQSURPSWHGW\SLFDOO\E\FXWWLQJWKHPRIIDOWKRXJKLWLVKDUGWRKDFNRIIWKHULJKWKDQGLIWKHOHIWLVDOUHDG\JRQHRUE\JQDZLQJLIQRFXWWLQJVXUIDFHFDQEHIRXQG

)RUHQVLF 3V\FKRORJ\ $ KXPDQ WUDQVIRUPLQJ LQWR DODUYDUDGLDWHVUDJH$Q\IRUHQVLFSV\FKRORJLVWZKRKDVDFKDQFHWRVWXG\RQHZLOOQRWLFHWKHVLJQVRIUHSUHVVHGIXU\,IVSRNHQWRWKHQVLJQVRISV\FKRWLFEUHDNGRZQDUHHYLGHQW9LFWLPVZLOODOVRVSRQWDQHRXVO\EDEEOHLQDZRUGVDODGVWURQJO\LQGLFDWLYHRIVFKL]RSKUHQLD

*DPH6WDWLVWLFV

$WKOHWLFV+HDOWK6FXILQJ6KRRWLQJVSDWKHDGVRQO\

+LW7KUHVKROG

$OHUWQHVV0RGLHU

:HDSRQ6LQXRXVOLPEVELWHRUVSDWRXWKHDG

$UPRUYV6KRRWLQJYV6FXILQJ

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

7KHVHFUHDWXUHVKDYHEHHQZUHQFKHGIURPWKHLUPRUWDOOLYHV DQG UHERUQ DV JURWHVTXH K\EULGV 7KH UHPQDQWVRI WKHSHRSOH WKH\XVHGWREHDUHVWHDGLO\GLJHVWHGE\

WKHKRUURUWRZKLFKWKH\KDYHEHHQH[SRVHG7KH\DUH FRPSOHWHO\ GHYRLG RI

KXPDQLW\DQGWKH\ZLOODWWDFNWKHLUIRUPHUEUHWKUHQRQVLJKW

,WWDNHVVRPHZHHNVIRUWKHQDOYHVWLJHVRIPRUWDOOLIHWR EH EURNHQ GRZQ 2QFH WKH WHUULEOH WUDQVIRUPDWLRQKDV WDNHQ SODFH WKHVH XQIRUWXQDWH FUHDWXUHV GHSDUWIURP RXU WLPH DQG VSDFH DQG UHWXUQ WR WKH VRXUFH RIWKHLUGHJUDGDWLRQ7KLVLVXVXDOO\WKHHQWLW\WKDWFDXVHGWKHLULQLWLDOEUHDNGRZQZKLFKZLOOW\SLFDOO\DFFHSWWKHODUYDDVLWVWKUDOO

7KH GHPHQWLD ODUYDH DWWDFN KXPDQV ZLWK LQFUHGLEOHIHURFLW\3HUKDSVVRPHIUDJPHQWRIWKHLUIRUPHUVHOYHVUHFDOOVZKDWLWKDVQRZORVWDQGLWFDQRQO\UHDFWYLROHQWO\WRZKDWQRZFRQIURQWVLW7KHH[WUDSODQDUPDVWHUVZKRJRYHUQWKH/DUYDHUHOLVKWKLVPLVHU\

%XUQLQJ (QY\ 7KH ODUYD KDV DQ LQVDQH ORDWKLQJ IRUKXPDQEHLQJVDVWKH\UHPLQGLWRIZKDWLWXVHGWREH$ODUYDFDQJRLQWRIUHQ]\ZKHQLWHQFRXQWHUVKXPDQVHVSHFLDOO\ LI LWNQHZWKHPSUHYLRXVO\:KLOH WKH ODUYDLVLQDIUHQ]LHGVWDWHLWLPPHGLDWHO\DWWDFNVWKHQHDUHVWWDUJHWZLWK QR DWWHPSW DW VWHDOWK ,Q WKLV VWDWHZKLFKODVWVURXQGVLWVZHDSRQERQXVHVLQFUHDVHE\EXWLWV+LW7KUHVKROGLVUHGXFHGWR

$ ODUYD WKDWZLVKHV WR UHPDLQKLGGHQPD\ EHXQDEOHWRGRVRLILWLVWHPSWHGWRJRLQWRIUHQ]\,ILWLVIDFLQJKXPDQVWKDW LWGLGQRWNQRZLQ OLIH LWPD\EHDEOH WRFRQWDLQLWVUDJHEXWLILWLVIDFLQJIRUPHUDFTXDLQWDQFHVLW LVDOPRVW LPSRVVLEOHIRU LW WRUHVLVW IUHQ]\ 7KH*0VKRXOGMXGJHWKHODUYDVOLNHO\UHDFWLRQEHLQJDOHUWIRUDQ\DFWLRQVRUIUDJPHQWVRIFRQYHUVDWLRQWKDWPLJKWWLSWKHODUYDRYHUWKHHGJH

&RQVWULFW/DUYDHWZLQHWKHLUWKLFNWHQWDFOHVDURXQGWKHLUGHVSLVHGKXPDQYLFWLPVDQGFUXVKWKHPWRGHDWK,IWKHODUYDKDVVXFFHVVIXOO\KLWZLWKDWHQWDFOHLWPD\PDNHD6FXILQJFRQWHVW RSSRVHGE\WKHYLFWLPV$WKOHWLFVRU6FXILQJYLFWLPVFKRLFHWRWZLQHDWHQWDFOHDURXQGWKHYLFWLP,IWKHODUYDZLQVWKHFRQWHVWLWDXWRPDWLFDOO\KLWVDQGGHDOVGDPDJHRQLWVQH[WDFWLRQFRQWLQXLQJWRGRVRIRUDVORQJDVLWVJULSODVWV

7KHHQVQDUHGYLFWLPPD\XVHKLVDFWLRQ WRDWWHPSW WRIUHHKLPVHOIIURPWKHWHQWDFOHE\EHDWLQJWKHODUYDLQDQ$WKOHWLFVRU6FXILQJFRQWHVWYLFWLPVFKRLFH

'HFDSLWDWH /DUYDH KDYH KRUUHQGRXV NQLIHOLNH WHHWK

WKDW FDQ VKHDU RII D YLFWLPV KHDG ZLWK RQH VQDS ,IWKHODUYDVFRUHVDRQLWVGDPDJHUROO WKHQWKHWDUJHWPD\KDYHEHHQGHFDSLWDWHG 7KHWDUJHWPXVWPDNHDQLPPHGLDWH+HDOWK WHVW DJDLQVW D WDUJHW GLIFXOW\ RI 7KHWDUJHWPD\VSHQG+HDOWKSRLQWVWRDWWHPSWWKLVWHVWDQGXQGHURUGLQDU\ FLUFXPVWDQFHVZLOOKDYH WR DV WKHGLIFXOW\QXPEHULVKLJKHUWKDQ7KLVUHSUHVHQWVWKHWUDGHRIIEHWZHHQDZRXQG WKDW LVPHUHO\KRUUHQGRXVDQGRQHZKLFKLVLQVWDQWO\IDWDO$WDUJHWZKRIDLOVWKHWHVWLVGHFDSLWDWHGRXWULJKW

'HSHQGLQJ RQ KRZ PXFK WKUHDW WKH ODUYD IDFHV LWZLOO WKHQ GR RQH RI WZR WKLQJV ,I WKHUH DUH PXOWLSOH

'(0(17,$/$59$

7KHODUYDZLOODOZD\VDWWHPSWWRUHWULHYHDVHYHUHGKHDGWKDWLWKDVVSDWDWDQRSSRQHQWRQFHLWKDVWDNHQFDUHRIDQ\REYLRXVWKUHDWV

0RQVWHUVDQG)DWDO$WWDFNV

$IHZFUHDWXUHVKDYHDWWDFNVWKDWFDQSRVVLEO\VSHOOLQVWDQWGHDWKIRUWKHYLFWLPVXFKDVWKH'HPHQWLD/DUYDVDELOLW\WRGHFDSLWDWHRUWKH0RUWLFLDQVOHWKDOXVHRIKLVERQHVDZ:KLOHWKHVHDWWDFNVDUHSDUWDQGSDUFHORIKRUURUJDPHVWKH\VKRXOGDOZD\VEHXVHGRQ13&VUVW:HVXJJHVWWKDW*0KDYHWKHPRQVWHUXVHLWVPRVWIDWDODELOLWLHVRQD13&LQVXFKDZD\WKDWD3&FDQVHHLW7KLVPDNHVIRUVHYHUHSRWHQWLDOVWDELOLW\ORVVIRUWKH3&DQGDOVRVHUYHVWKHSXUSRVHRIZDUQLQJWKHSOD\HUVWKDWWKHFUHDWXUHKDVWKHDELOLW\WRFDXVHLQVWDQWDQHRXVGHDWK

*HODWLQRXV%RG\$GHPHQWLDODUYDLVPRVWO\FRPSRVHGRI WRXJK MHOO\OLNHPDWWHU WKDW H[XGHV DZIXO VOLPH ,WFDQ VTXHH]H LWVHOI LQWR SODFHV WKDW ZRXOG DSSDUHQWO\EH WRR VPDOO IRU LW WKRXJK WKLV WDNHV LW FRQVLGHUDEOHWLPH$VDJXLGHOLQHDODUYDFDQVTXHH]HXQGHUDGRRULQ PLQXWHV WKURXJK D OHWWHUER[ LQ DQGEHWZHHQRRUERDUGVLQDQKRXU

$ ODUYDV JHODWLQRXV ERG\ DQG VOLP\ FRDWLQJPDNH LWLPSRVVLEOH WR UHVWUDLQZLWKKDQGFXIIV URSH RU VLPLODUGHYLFHV

5HJHQHUDWLRQ 7KH ODUYDV ERG\ LV KDUG WR GDPDJHSHUPDQHQWO\,WUHFRYHUVRQH+HDOWKOHYHOHYHU\PLQXWHXQOHVVWKHGDPDJHZDVGHDOWE\UHDFLGFKHPLFDORUHOHFWULFDO VRXUFHV ,Q DGGLWLRQ LW GRHV QRW GLH ZKHQUHGXFHG EHORZ ]HUR+HDOWK XQOHVV WKH GDPDJH GHDOWWRLWLVRIRQHRIWKHDIRUHPHQWLRQHGW\SHVWKRXJKRQFHUHGXFHG WR +HDOWKRU ORZHU LW DSSHDUVYHU\GHDGLQGHHG

,WLVHDV\WRPLVWDNHDPDQJOHGKHDSRIVOLP\PXVKIRUDGHDGODUYDDQGIDLOWRQRWLFHWKHUHVLGXDOOLIHWKHUHLQ,I LW LV QHFHVVDU\ WR WKH SORW IRU WKH SOD\HUV WR GHWHFWWKDW D ODUYD LV VWLOO DOLYH WKHQ XVH RI1DWXUDO+LVWRU\HVWDEOLVKHVWKDWWKHSURWRSODVPLVVWLOOUHJHQHUDWLQJ,IWKLVLQIRUPDWLRQLVQRWQHFHVVDU\WRWKHSORWWKHQDWZRSRLQW1DWXUDO+LVWRU\VSHQGXQFRYHUVLW

RSSRQHQWVIDFLQJLWLWZLOOVSLWWKHKHDGDWRQHRIWKHP7KLV LV UHVROYHGDVD6KRRWLQJDWWDFNZKLFK WKH ODUYDPD\PDNHLPPHGLDWHO\LWQHHGQRWZDLWXQWLOWKHQH[WURXQG

$OWHUQDWLYHO\LIWKHUHLVQRWPXFKSHUFHLYHGGDQJHULQWKHDUHD LWZLOOVZDOORZWKHKHDGDQGWLOW WKHFDGDYHUXSWRGUDLQWKHFRQWHQWVDVLILWZHUHGULQNLQJIURPDQXQFRUNHGERWWOH7KLVNHHSVLWRFFXSLHGIRUGURXQGV

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

,QGHHGZLWK VRPHPHQ LW LVQRW WKHLUERGLHV WKDWDUHZHDN EXW WKHLU YHU\ JHQLXV WKDW EOD]HV WRR EULJKWO\7KH\ QHJOHFW WR HDW WR DWWHQG WR WKH UHJXODU GXW\ RIWKHLUOLYHVHYHQWREDWKHEHFDXVHDOOWKHVHWKLQJVWDNHWKHPDZD\IURPSXUVXLWRIWKHRQH*RDOWKDWWKH\PXVWDFKLHYH IURP WKHZRUN WKDWRQO\ WKH\ VR WKH\ VHH LWFDQGR

)HZFDVHVRIWKLVNLQGKDYHEHHQVRFHOHEUDWHGRIODWHDVWKDWRI3DXO*UHJRU\$\RXQJDQGVLQJXODUO\WDOHQWHGVWXGHQWKHKDGDFKLHYHGPXFKLQWKHHOGRIHOHFWULFDO

VFLHQFH EHDULQJ WKH SKRVSKRUHVFHQW WRUFK RI (GLVRQLQWR UHDOPV WKDW WKH JRRG $PHULFDQ FRXOG QRW KDYHIRUHVHHQ:KHWKHUKHZRXOGKDYHJRQHRQWRLQWURGXFHVRPHLQYHQWLRQFRPSDUDEOHWR(GLVRQVEXOELVQRWIRUXVWRNQRZIRUDVWKHSDSHUVZHUHNHHQWRWHOOXVDWWKHWLPHKHLVGHDG

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

'5($07($5(5

WR DQ LOOXPLQDWHG VFUHHQ SUHVXPDEO\ E\ 0DUFRQLVPHWKRGVRUVRPHIXUWKHUUHQHPHQWWKHUHRI

7KLV ZRXOG DVVXUHGO\ KDYH EHHQ D JUHDW ERRQ WRPDQNLQG ZHUH LW SRVVLEOH 2QH HQYLVLRQV WHOHJUDSKSDUWLHVKHOGLQJHQWOHPHQVVDORQVZKHUHWKHDFWLYLWLHVRI D VLQJOH GHPLPRQGDLQH LQ 3DULV DUH WUDQVPLWWHGWR DQ DXGLHQFH RI WKRXVDQGV EXW ZH GLJUHVV ,I WKHHOHFWURYLVXDO WHOHJUDSK LV PHDQW WR EH WKHQ SHUKDSVDQRWKHUVKDOOGLVFRYHULW,QWKLVDJHRIVFLHQFHVKDOOZHGHHPDQ\WKLQJLPSRVVLEOH"

2QHJOHDQVIURP*UHJRU\VZULWLQJVWKHVHQVHRIDQREOHPLQGRHUWKURZQ+LVVFULEEOLQJVDUHLQWHUVSHUVHGZLWKLPSUHFDWLRQVWRDUFKDQJHOVIRUSURWHFWLRQKLQWLQJWKDWDEODFNDQGWHUULEOHWKLQJZDVSXUVXLQJKLPWKURXJKKLVGUHDPVDQGWKDWRQO\LQKLVGUHDPVFRXOGKHVHHZKDWKH FDOOV WKH WUDQVKLVWRULFSHUIHFWLRQ WKDW LQIRUPVKLVLQYHQWLRQV 6OHHS LWZDV FOHDUPXVWEH DYRLGHGDW DOOFRVWVRUWKHEHDVWZRXOGFODLPKLP

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

(YLGHQWO\WKLVGHYLFHZDVRYHUO\VWURQJIRU*UHJRU\VIUDPH ZHDNHQHG DV LW ZDV E\ PDQ\ GD\V ZLWKRXWVOHHS7KHFRQFOXVLRQRIWKHFRURQHULVWKDWWKHVKRFNVWKDW VKRXOGKDYHZRNHQKLP LQVWHDG VWLOOHGKLVKHDUW

VR WKDW ZKHQ KLV URRPVZHUH RSHQHG DQG KLV VDGFRUSVH GLVFRYHUHG KH ZDV TXLWH GHDG +LVIDFH WZLVWHG DOPRVW EH\RQG UHFRJQLWLRQ E\WKHHOHFWULFVXUJHZDVVZLIWO\FRYHUHGZLWKDVKHHW

)URP7KH0DUW\UVRI3URJUHVVE\-RQDWKDQ3$VKIRUG

$OO7KDW5HPDLQV)RUHQVLF $QWKURSRORJ\ 7KRVH ZKR GLH IURP GUHDPWHDUHUDVVDXOWVXVXDOO\KDYHQRSK\VLFDO LQMXULHVDWDOO7KHLUKHDUWVVLPSO\VWRS,WLVFRPPRQIRUWKHLUIDFHVWREH FRQWRUWHG LQ IHDU WKRXJK WKHLU H\HVZLOO DOZD\VEHFORVHGVLQFHWKH\ZHUHDVOHHSDWWKHSRLQWRIGHDWK

:KHQ WKH YLFWLP KDV EHHQ SXUVXHG RYHU WKH FRXUVHRI PRUH WKDQ RQH QLJKW KH ZLOO W\SLFDOO\ KDYH WDNHQSUHFDXWLRQV DJDLQVW IDOOLQJ DVOHHS 7KH EORRG ZLOOWKXV FRQWDLQ KLJK OHYHOV RI VWLPXODQWV FDIIHLQHDPSKHWDPLQH VXOIDWH WDXULQH IURP HQHUJ\ GULQNVDQGVXFKOLNH6RPHHVSHFLDOO\GHVSHUDWHYLFWLPVHYHQZRXQGWKHPVHOYHVVWLFNLQJQHHGOHVXQGHUWKHLUVNLQRUKDPPHULQJQDLOVLQWRWKHLUKDQGVMXVWVRWKDWWKHSDLQZLOONHHSWKHPDZDNH

,QWKHYHU\UDUHHYHQWRIGHDWKDWWKHKDQGVRIDPDQLIHVWGUHDPWHDUHUWKHYLFWLPLVFRYHUHGZLWKELWHV 'HDWKDSSHDUVWRKDYHUHVXOWHGIURPDFRPELQDWLRQRIEORRGORVVIURPWKHVHZRXQGVDQGFUXVKLQJSUHVVXUHFDXVLQJLQWHUQDORUJDQGDPDJH :KHQDQDO\]HG WKHELWHVDUHIRXQGWREHVWULNLQJO\VLPLODUWRWKRVHLQLFWHGE\KRUVHVRQO\IDUPRUHVDYDJH

(YLGHQFH&ROOHFWLRQ,IWKHYLFWLPGLHGLQGRRUVWKHQLWLVDOVROLNHO\WKDWKHZLOOKDYHWDNHQSOHQW\RIPHDVXUHVWRUHPDLQFRQVFLRXV7KHWHOHYLVLRQZLOOEHRQDQGWKHYROXPH WXUQHG XS DV ZLOO WKH UDGLR DQG DQ\ RWKHUVRXUFHVRIQRLVH

2FFXOW 6WXGLHV ,I WKH KRUVHOLNH ELWHV KDYH EHHQGLVFRYHUHG RQ D GHDG YLFWLP WKHQ D VWXGHQW RI WKHRFFXOW PD\ UHPHPEHU IRONORUH WDOHV RI D FUHDWXUHWKDW SHUVHFXWHG LWV YLFWLPV LQ WKHLU GUHDPV D OLWHUDOQLJKW PDUH ZKLFK HYHQWXDOO\ FDXVHG GHDWK WKURXJKH[KDXVWLRQRULQFXUDEOHLQVDQLW\

3DWKRORJ\$SHUVRQVXIIHULQJIURPWKHSHUVHFXWLRQRI DGUHDP WHDUHU VKRZVDOO WKH VLJQVRI ORVW VOHHS

D KDJJDUG H[SUHVVLRQEORRGVKRWH\HVZLWKGDUNKROORZVXQGHUWKHPVOXUUHG

VSHHFKDQGODFNRIDELOLW\WRIRFXV

*DPH6WDWLVWLFV

$EHUUDQFH$WKOHWLFV+HDOWK6FXILQJ

+LW7KUHVKROG

$OHUWQHVV0RGLHUSV\FKLFVHQVHV

6WHDOWK0RGLHUVLOHQWO\OHYLWDWHV

:HDSRQPXOWLSOHELWH

$UPRU1RQH

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

'UHDP ,QWUXVLRQ )URP D GUHDP WHDUHUVSHUVSHFWLYH D VOHHSHUV GUHDPV DUH KD]\ FRORUIXOEXEEOHV GLVWHQGLQJ WKH PHPEUDQH WKDW VHSDUDWHV

WKHVXEFRQVFLRXVPLQGIURPWKHFUHDWXUHVJUD\PLVW\KRPHWKHODUJHUDQGPRUHLQWHQVHWKHEXEEOHVDUHWKHPRUH LQWHQVHDQGDSSHWL]LQJ WKHGUHDPLV7KHGUHDPWHDUHU FRPHV VQXILQJ DW DQ DWWUDFWLYH LQWUXVLRQ WKHQWULHV WRFODZLWVHOIDZD\LQUHQGLQJWKHEDUULHUDSDUW8QOHVV WKH YLFWLP VXFFHHGV RQ D 6WDELOLW\ FRQWHVWYLFWLPV6WDELOLW\YHUVXVWKHGUHDPWHDUHUV$EHUUDQFHZLWK ERWK VLGHV EHLQJ DOORZHG WR VSHQG SRRO SRLQWVWKHGUHDPWHDUHUKDVHQWHUHGWKHGUHDP,IWKHGUHDPHUNHHSV WKH WHDUHU DWED\ LW FDQQRWDWWHPSW WR HQWHU WKHGUHDPDJDLQWKDWQLJKW

2QFHWKHDWWDFNHULVLQVLGHWKHEXEEOHLWEHJLQVWRVHDUFKIRUWKHGUHDPHUZKRVHRQO\FKDQFHRIHVFDSHQRZLVWREHZRNHQ IRUWXLWRXVO\ E\ VRPHRXWVLGH DJHQW )DLOLQJWKDWWKHGUHDPHUFDQDOZD\VDWWHPSWWRVHHNUHIXJHLQWKHIDEULFDWLRQVRIKLVRZQGUHDP

2QFHWKHWHDUHUKDVIRXQGLWVSUH\LWDWWDFNVXVLQJLWV6RXO 6KUHG DELOLW\ 6RPHWLPHVZKHQ WKH WDUJHW RIIHUVVRPH UHVLVWDQFH WKH KXQWHU ZLOO DWWHPSW WR FKDQJHHOHPHQWVRIWKHGUHDPWRVXLWLWVHOI)RUH[DPSOHLIWKHGUHDPHUKDVWDNHQUHIXJHLQDZKLWHFDVWOHSURWHFWHGE\DQDUP\RIOR\DONQLJKWVWKHGUHDPWHDUHUFRXOGGLVSHOWKHODWWHUDQGWHDUGRZQWKHIRUPHU

7R DOWHU RU GHVWUR\ DQ\ GUHDP HOHPHQW LW HQWHUV DQ$EHUUDQFH FRQWHVW RSSRVHG E\ WKH YLFWLPV6WDELOLW\7KLV WKHQ IXQFWLRQV DV OXFLG GUHDPLQJ IRUZKLFK VHHWKHIHDWEHORZ$VZHOODVGHVWUR\LQJGUHDPHOHPHQWVWKHWHDUHUFDQDOVRLQWURGXFHLWVRZQHOHPHQWVVXFKDVWKLFNHQHG DLU ZKLFK VORZV GRZQ WKRVH WU\LQJ WR UXQDZD\JLYLQJWKHPDKLJKHUGLIFXOW\QXPEHUIRUWKHLU$WKOHWLFVRU)OHHLQJWHVWVDQGFRQWHVWVDQGFROODSVLQJRRUVZKLFKOHDYHHHLQJGUHDPHUVVWUDQGHG

$W WKH *0V GLVFUHWLRQ VRPH FKDUPV DQG WDOLVPDQVFDQKHOSWKHVOHHSHUUHVLVWSUHGDWLRQ)RUH[DPSOHWKHKDQJLQJFLUFXODUZHEFDOOHGDGUHDPFDWFKHUDYDLODEOHLQ 1HZ $JH VWRUHV PD\ ORZHU WKH GLIFXOW\ RI WKH6WDELOLW\WHVWWRNHHSWKHGUHDPWHDUHUDZD\WR1RWHWKDWVXFKLWHPVFDQRQO\KHOSSUHYHQWWKHFUHDWXUHIURPHQWHULQJ WKH GUHDP DQG RIIHU QR GHIHQVH RQFH LW LVLQVLGH

,I WKH VOHHSHU LV ZRNHQ WKH EXEEOH EXUVWV DQG WKHWHDUHU LV IRUFLEO\HMHFWHGEDFN LQWR LWVRZQUHDOP ,W LVKRZHYHU GLIFXOW WR ZDNH D SHUVRQ RQFH DQ LQYDGHUKDVHQWHUHGKLVGUHDP6KRXWLQJVODSSLQJDQGVLPLODUWDFWLFVRQO\KDYHDRQH LQ WKUHH FKDQFHRIZDNLQJ WKHGUHDPHURQDQ\JLYHQURXQG$QLQMHFWLRQRIVWLPXODQWVDGPLQLVWHUHGE\DFRPSHWHQWSURIHVVLRQDOFDQZDNHWKH

GUHDPHULQVWDQWO\7KLVUHTXLUHVDVXFFHVVIXO0HGLFWHVWGLIFXOW\DQGDFFHVVWRDSSURSULDWHGUXJV

$GUHDPWHDUHUFDQRQO\DWWHPSWWRHQWHUDJLYHQGUHDPRQFH,IWKHDWWHPSWIDLOVLWPXVWZDLWIRUWKHLWVYLFWLPWRZDNH WKHQ HQWHU5(0 VOHHS DJDLQ WKXV FUHDWLQJ DQHZEXEEOH

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

6KUHGGLQJVRXOVLVDQXWULWLRXVDFWLYLW\ (DFKSRLQWRI6WDELOLW\GDPDJHWKDWWKHGUHDPWHDUHUGHDOVJUDQWVLWRQH ERQXV+HDOWK OHYHO ZKLFK GLVVLSDWHV ZLWKLQ RQHKRXULILWLVQRWXVHGRUDUHFRYHUHGSRLQWRI$EHUUDQFHDVWKHFUHDWXUHSUHIHUV

7KH'UHDPLQJ5HDOP7KHWHDUHUVOLYHLQWKH'UHDPLQJ5HDOP7KLVLVIRUWKHPRVWSDUWDYDJXHDQGLQVXEVWDQWLDOSODQHRIH[LVWHQFHWKDWFRQQHFWVWKHGUHDPVRILQGLYLGXDOSHRSOH6OHHSLQJFKDUDFWHUV DOZD\V HQWHU WKHVH UHDOPV ZKHWKHU WKH\DUHDZDUHRILWRUQRWZKHQWKH\HQWHU5(0VOHHS)RUJDPHSXUSRVHV WUHDWGUHDPLQJDV LI LWZHUHD IRUPRI

DVWUDOSURMHFWLRQZLWKWKHOLPLWDWLRQWKDWHYHU\SHUVRQKDV WKHLURZQFORVHG GUHDPSODQH WKDWRWKHUVFDQQRWHQWHU7KLVDSSHDUVDVDEXEEOHEORZQLQWKHPDWWHURIGUHDPLQJ VSDFH$SHUVRQZKRKDV OHDUQHG WKHDUW RIOXFLGGUHDPLQJFDQDOWHUWKHIHDWXUHVRIKLVRUKHURZQGUHDPSODQHYROXQWDULO\

$ JLYHQ GUHDPHUV SODQH LV SRSXODWHG ZLWK LPDJHVGUDZQ IURP KLV RU KHU OLIH ZKLFK DSSHDU DV VROLGREMHFWV ERWK WR WKH VOHHSHU DQG WR DQ\RWKHU HQWLW\ LQWKHEXEEOH

7KHGUHDPWHDUHULVRQHRIWKHRQO\FUHDWXUHVWKDWFDQFDXVH DFWXDO KDUP IURPZLWKLQ D GUHDP 2WKHUZLVHFKDUDFWHUVZKRVXIIHUGDPDJHIURPGUHDPVRXUFHVORVHGUHDP+HDOWKDQGZDNHZLWKDVWDUWZKHQWKHVHGURSWR]HUR2QFHZRNHQWKH\FDQQRWHQWHU5(0VOHHSDJDLQIRUDQKRXUZKHQWKH\GRWKHLUGUHDPLQJERGLHVDUHDWIXOO+HDOWKRQFHDJDLQ

(Q