GOTHAM CITY RESEARCH’S OPINIONS:

• Aurelius’ shares are worth no more than €8.56 per share, implying at least -88% downside to its current share price.

• Aurelius may face similar scrutiny as Philip Green did in the UK, who was accused of systematically plundering BHS.

SUMMARY OF FINDINGS:

• We were unable to reconcile 43% – 100%+ of Aurelius’s reported earnings to the sum of its subsidiaries’ earnings.

• 2015 contingent liabilities, as calculated by the sum of its parts, seem understated by 46% or more.

• Aurelius’ income from negative goodwill accounts for over 120% of 2011-2015 earnings.

• Similarly high levels of negative goodwill preceded a permanent -95%+ collapse in the share price of Arques AG, whose business model seems identical to Aurelius’.

• Aurelius claims to be a “good home for companies” yet nearly 60% of portfolio companies entered insolvency after Aurelius sold them, per our review.

• Our estimate of NAV is 80%-90% lower than Aurelius’ unaudited and DCF-based NAV.

• Aurelius has never received an unqualified audit opinion on its audited financial statements.

• CEO Dirk Markus, a former Finance executive of Arques is also the CFO of Aurelius, according to Hauck & Aufhauser.

• Aurelius’ executives sold €169 million of shares in December 2016 (40% or more their stake) at €52.5 per share. The prevailing market price was €59 that day.

• Aurelius has been accused of illegal conveyance (and found guilty in some cases) in its business dealings (Einhorn case, EDS case).

• Aurelius “abstains” from providing negative goodwill-related disclosures “because it believes that they can lead to economic disadvantages.”