KEY CONSIDERATIONS

Your Board believes that it is in the best interests of Shareholders as a whole to support your Company by VOTING AGAINST the Requisitioned Resolutions for the following reasons:

·       Herald's investment performance: Herald is a specialist investment company that has delivered outstanding investment performance for its Shareholders, as set out in the table below and further described on pages 9 to 10 of the Circular.

Source: LSEG Datastream. Data to 31 December 2024 (being the latest practicable date for this data). Total return calculations assume dividend reinvestment as at the ex-dividend date. All figures are unaudited. Past performance is not a reliable indicator of future results.

(1)   Herald's NAV total return based on 98.7 pence per Share (100 pence subscription price less launch costs of 1.3 pence) invested at inception, excluding warrants.

(2)   Herald's Share price total return based on 90.9 pence per Share, the capital gains tax base subscription price for Shareholders adjusted for warrants, which were issued on a 1 for 5 basis.    

(3)   Russell 2000 Technology Index (small cap) total return performance since 31 March 1996 (the date that the Company began investing globally).

(4)   Despite its claims in respect of its performance track record as a fund manager, Saba has failed to provide evidence of Saba having a long-term track record similar or equal to that of your Company in its statement to Shareholders (contained in Part 3 of the Circular).

The Board believes that, since its inception, Saba has materially underperformed Herald. Since Saba's Inception in April 2009, Herald has produced a NAV total return of over 865 per cent.You should VOTE AGAINST the Requisitioned Resolutions to avoid losing the opportunity to remain invested in Herald's strategy, which has been highly successful over the long term.

·           Saba's opportunistic proposal to take control: Your Board believes the Requisition is part of a campaign by Saba to take control of your Company. Your Board believes that only VOTES AGAINST the Requisitioned Resolutions can protect Shareholders' interests. 

·    Your Board believes that if Saba gains control and seeks to implement a different strategy, significant value could be lost for Shareholders as a result of forced selling of parts of the Portfolio.

·      In recent weeks, Saba has been building its interests in the Company whilst Shares have traded at very low single figure discounts. Your Board believes this may demonstrate that Saba wishes to take control of your Company for its own economic benefit rather than due to concerns about the Company's performance or share rating.

·    Saba has stated that it intends to propose that Saba be appointed as the manager to pursue its own investment strategy, which is expected to be focused on the short-term and fundamentally different from your Company's current investment policy. However, Saba has failed to provide concrete details of these plans and the terms upon which it would be appointed.

You should VOTE AGAINST the Requisitioned Resolutions to protect the value of your investment and to ensure Saba does not take control of your Company for its own economic benefit.

·          Herald's strong, independent Board and high standards of corporate governance: Saba's Proposed Appointees either work for or have been nominated by Saba. They are not considered to be independent and, therefore, may not have your best interests at heart. Saba has given no assurance that the current safeguards for Shareholders, described on pages 10 to 12 of the Circular, will be retained if Saba and the Proposed Appointees take control. You should VOTE AGAINST the Requisitioned Resolutions to ensure that your Company retains a fully independent Board focused on protecting Shareholders' interests.

·           Herald's investment outlook: The technology sector is experiencing a particularly dynamic phase. Drivers include: (i) the rapid acceleration of computational power and data analytical capabilities enabling new products and services driven by artificial intelligence, and other disruptive technologies; (ii) the journey to net zero; and (iii) an unstable world geopolitically leading to innovation in the defence and cybersecurity sectors, amongst others. Investments in the Company's target companies often start small and need to be nurtured to enhance value for Shareholders. You should VOTE AGAINST the Requisitioned Resolutions to remain invested in the Company's distinctive investment strategy.

For these reasons, and those set out below, your Board recommends unanimously that all Shareholders VOTE AGAINST each of the Requisitioned Resolutions.