<SEC-DOCUMENT>0001398344-18-006883.txt : 20180723
<SEC-HEADER>0001398344-18-006883.hdr.sgml : 20180723

<ACCEPTANCE-DATETIME>20180504162923

<PRIVATE-TO-PUBLIC>

ACCESSION NUMBER:		0001398344-18-006883

CONFORMED SUBMISSION TYPE:	N-2

PUBLIC DOCUMENT COUNT:		9

FILED AS OF DATE:		20180504

DATE AS OF CHANGE:		20180611


FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			HERZFELD CARIBBEAN BASIN FUND INC

		CENTRAL INDEX KEY:			0000880406

		IRS NUMBER:				650396889

		STATE OF INCORPORATION:			MD

		FISCAL YEAR END:			0630



	FILING VALUES:

		FORM TYPE:		N-2

		SEC ACT:		1933 Act

		SEC FILE NUMBER:	333-224685

		FILM NUMBER:		18808334



	BUSINESS ADDRESS:	

		STREET 1:		119 WASHINGTON AVENUE, SUITE 504

		CITY:			MIAMI BEACH

		STATE:			FL

		ZIP:			33139

		BUSINESS PHONE:		3052711900



	MAIL ADDRESS:	

		STREET 1:		119 WASHINGTON AVENUE, SUITE 504

		CITY:			MIAMI BEACH

		STATE:			FL

		ZIP:			33139



	FORMER COMPANY:	

		FORMER CONFORMED NAME:	FIRST CUBA FUND INC

		DATE OF NAME CHANGE:	19920929




FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			HERZFELD CARIBBEAN BASIN FUND INC

		CENTRAL INDEX KEY:			0000880406

		IRS NUMBER:				650396889

		STATE OF INCORPORATION:			MD

		FISCAL YEAR END:			0630



	FILING VALUES:

		FORM TYPE:		N-2

		SEC ACT:		1940 Act

		SEC FILE NUMBER:	811-06445

		FILM NUMBER:		18808335



	BUSINESS ADDRESS:	

		STREET 1:		119 WASHINGTON AVENUE, SUITE 504

		CITY:			MIAMI BEACH

		STATE:			FL

		ZIP:			33139

		BUSINESS PHONE:		3052711900



	MAIL ADDRESS:	

		STREET 1:		119 WASHINGTON AVENUE, SUITE 504

		CITY:			MIAMI BEACH

		STATE:			FL

		ZIP:			33139



	FORMER COMPANY:	

		FORMER CONFORMED NAME:	FIRST CUBA FUND INC

		DATE OF NAME CHANGE:	19920929



</SEC-HEADER>

<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>fp0033212_n2.htm
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<HTML>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 11pt">As filed with
the Securities and Exchange Commission on May 4, 2018</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 11pt">&nbsp;Securities
Act File No. 333-[ ]</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 11pt">&nbsp;Investment
Company Act File No. 811-06445</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-size: 11pt"><B>UNITED
STATES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;<B>SECURITIES
AND EXCHANGE COMMISSION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;<B>Washington,
D.C. 20549</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>FORM N-2</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">[X] &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">[ ]  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-Effective
Amendment No.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 20pt"><FONT STYLE="font-size: 11pt">[
]  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Post-Effective Amendment No. ___</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-size: 11pt">and/or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">[X]  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REGISTRATION
STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">Amendment
No. 16</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">THE HERZFELD
CARIBBEAN BASIN FUND, INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;(Exact
Name of Registrant as Specified in Charter)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">119 Washington
Avenue, Suite 504 Miami Beach, FL 33139</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;(Address
of Principal Executive Offices)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">Registrant&rsquo;s
Telephone Number, Including Area Code: (305) 271-1900</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">Erik M. Herzfeld</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">The Herzfeld
Caribbean Basin Fund, Inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;119
Washington Avenue, Suite 504 Miami Beach, FL 33139</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;(Name
and Address of Agent for Service)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">Copies to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font-size: 10pt; width: 100%; background-color: white">
<TR>
    <TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="width: 30%; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">Erik M. Herzfeld</FONT></TD>
    <TD STYLE="width: 5%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 45%; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">Joseph V. Del Raso, Esq.</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">119 Washington Avenue</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">Pepper Hamilton LLP</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">Suite 504 </FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">3000 Two Logan Square</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">Miami Beach, FL 33139</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">18th and Arch Streets</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">Philadelphia, PA 19103</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Approximate date of proposed
public offering: From time to time after the effective date of this Registration Statement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">If any securities being registered
on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, as amended,
other than securities offered in connection with a dividend reinvestment plan, check the following box. [X]</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">It is proposed that this filing
will become effective (check the appropriate box)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">[ ] When declared effective pursuant
to Section 8(c)</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">CALCULATION OF REGISTRATION FEE
UNDER THE SECURITIES ACT OF 1933</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 25%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Title of Securities<BR>
Being Registered</B></FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 23%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Amount Being<BR>
Registered
    (1)</B></FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 23%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Proposed Maximum<BR>
Aggregate Offering Price </B></FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 23%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Amount of<BR>
Registration
    Fee(2)</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Common Stock</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Subscription Rights</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$88,000,000</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$10,956</FONT></TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">There
                                         are being registered hereunder such indeterminate number of shares of common stock and
                                         such indeterminate number of subscription rights as shall have an aggregate offering
                                         price not to exceed $88 million, less the aggregate dollar amount of all securities previously
                                         issued hereunder. The securities registered hereunder also include such indeterminate
                                         number of securities of each identified class of securities, which may be offered from
                                         time to time in unspecified numbers and at indeterminate prices, and as may be issued
                                         upon conversion, redemption, repurchase, exchange or exercise of any securities registered
                                         hereunder, including under any applicable anti-dilution provisions of any of such securities.&nbsp;
                                         In addition, pursuant to Rule&nbsp;416 under the Securities Act of 1933, as amended,
                                         or the Securities Act, the securities being registered hereunder includes such indeterminate
                                         number of securities of each identified class of securities as may be issuable with respect
                                         to the securities being registered hereunder as a result of stock splits, stock dividends
                                         or similar transactions.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(2)</FONT></TD><TD><FONT STYLE="font-size: 11pt">Calculated
                                         pursuant to Rule&nbsp;457(o)&nbsp;under the Securities Act based on the proposed maximum
                                         aggregate offering price of all securities listed. Pursuant to Rule 415(a)(6) under the
                                         Securities Act of 1933, as amended, this Registration Statement includes $88,000,000
                                         of unsold securities of the registrant that have been previously registered on the Registration
                                         Statement on Form N-2 (File No. 333-202213) originally filed by the registrant on May
                                         21, 2015 and most recently declared effective on November 2, 2015 (the &ldquo;prior registration
                                         statement&rdquo;). A filing fee of $11,620 was paid under the prior registration statement,
                                         of which $11,141 was paid in connection with such unsold securities and is being offset
                                         against the total registration fee pursuant to Rule 457(p), resulting in a payment of
                                         $0.00 in connection with the filing of this Registration Statement. Pursuant to Rule
                                         415(a)(6), the offering of the unsold securities registered under the prior registration
                                         statement will be deemed terminated as of the effective date of this Registration Statement.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><B>The Registrant hereby amends
this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file
a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to said Section 8(a), may determine.</B></FONT></P>



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<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><IMG SRC="fp0033212_01.jpg" ALT="(HERZFELD LOGO)">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #DF1A1E"><FONT STYLE="font-size: 11pt"><B>The information
in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer and sale is not permitted.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #DF1A1E"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #DF1A1E"><FONT STYLE="font-size: 11pt"><B>Subject
to Completion, dated May 4, 2018</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #DF1A1E"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><B>BASE PROSPECTUS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>$88,000,000</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>THE HERZFELD
CARIBBEAN BASIN FUND, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>Common
Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>Subscription
Rights for Common Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Herzfeld
Caribbean Basin Fund, Inc. (the &ldquo;Fund&rdquo;) is a non-diversified, closed-end management investment company registered
under the Investment Company Act of 1940 (the &quot;1940 Act.&quot;). Its investment adviser is HERZFELD/CUBA, a division of Thomas
J. Herzfeld Advisors, Inc. (the &ldquo;Adviser&rdquo;). The Fund&rsquo;s investment objective is long-term capital appreciation.
To achieve its objective, the Fund invests in issuers that are likely, in the Adviser&rsquo;s view, to benefit from economic,
political, structural and technological developments in the countries in the Caribbean Basin, which include, among others, Cuba,
Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba, Haiti, the former Netherlands Antilles, the
Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia, the United States and Venezuela,
or the &ldquo;Caribbean Basin Countries&rdquo;. The Fund invests at least 80% of its total assets in a broad range of securities
of issuers, including U.S.-based companies which engage in substantial trade with, and derive substantial revenue from, operations
in the Caribbean Basin Countries. The Fund may invest more than 25% of its total assets in the securities of U.S.-based companies,
which constituted approximately 56% of the Fund's total assets as of December 31, 2017. Total assets includes the amount of any
borrowings for investment purposes. At such time as it becomes legally permissible for U.S. entities to invest directly in Cuba,
the Fund will consider such investments. For additional information, see &quot;Investment Objective and Policies&quot;. Equity
and equity-linked securities include, but are not limited to, common stock, preferred stock, debt securities convertible into
equity, warrants, options and futures. An investment in the Fund is not appropriate for all investors and should not constitute
a complete investment program. No assurances can be given that the Fund&rsquo;s objective will be achieved.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We may offer,
from time to time, in one or more offerings of up to $88 million of our common stock, par value $0.001 per share, or subscription
rights described in this prospectus. We may sell our securities through underwriters or dealers, &ldquo;at-the-market&rdquo; to
or through a market maker into an existing trading market or otherwise directly to one or more purchasers or through agents or
through a combination of methods of sale. The identities of such underwriters, dealers, market makers or agents, as the case may
be, will be described in one or more supplements to this prospectus. The securities may be offered at prices and on terms to be
described in one or more supplements to this prospectus. In the event we offer common stock, the offering price per share of our
common stock exclusive of any underwriting commissions or discounts will not be less than the net asset value, or NAV, per share
of our common stock at the time we make the offering except (1) in connection with a subscription rights offering to our existing
stockholders, (2) with the consent of the majority of our common stockholders and approval of our board of directors or (3) under
such circumstances as the Securities and Exchange Commission <B>(&ldquo;</B>SEC&rdquo;) may permit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">Our
common stock is traded on the NASDAQ Capital Market under the symbol &ldquo;CUBA.&rdquo; On May 1, 2018, the last reported sales
price on the NASDAQ Capital Market for our common stock was $6.94 per share. We determine the NAV per share of our common stock
no less frequently than monthly. Our NAV per share of our common stock as of May 1, 2018 was $8.30 (unaudited) and our total net
assets were $50,900,892.95 (unaudited). As of May 1, 2018 there were 6,133,659 shares of our common stock outstanding.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Investing
in the securities may be considered speculative and involves a high degree of risk, including the risk of a total loss of investment.
Shares of closed-end investment companies frequently trade at a discount to their net asset value. See &ldquo;Risk Factors and
Special Considerations&rdquo; beginning on page 17 of this prospectus to read about the risks you should carefully consider before
investing in our securities.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Neither
the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><B>Investing in the Fund involves
risks. See &ldquo;Risk Factors and Special Considerations&rdquo; on page 17 of this prospectus.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>The date
of this prospectus is May 4, 2018</B></FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">This prospectus
may not be used to consummate sales of securities by us through agents, underwriters or dealers unless accompanied by a prospectus
supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Please carefully
read this prospectus and any accompanying prospectus supplement before investing in our securities and keep each for future reference.
This prospectus and any accompanying prospectus supplement will contain important information about us that a prospective investor
ought to know before investing in our securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We are required
to file with or submit to the U.S. Securities and Exchange Commission, or &quot;SEC,&quot; annual, semi-annual and quarterly reports,
proxy statements and other information about us. You may request copies of these reports and filings, including this prospectus
and accompanying prospectus supplement, free of charge, make inquiries or request other information about us by contacting us
by mail at 119 Washington Avenue, Suite 504 Miami Beach, FL 33139 or by telephone at (800) TJH-FUND (toll-free) or (305) 271-1900.
Copies of these reports and filings are also available free of charge through our website at <I>http://herzfeld.com/cuba. </I>The
SEC also maintains a website at <I>http://www.sec.gov</I> that contains this information. The inclusion of our website address
above and elsewhere in this prospectus and any accompanying prospectus supplement is, in each case, intended to be an inactive
textual reference only and not an active hyperlink to our website. The information contained in, or that can be accessed through,
our website is not part of this prospectus or any accompanying prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>No dealer,
salesperson or other person is authorized to give any information or to represent anything not contained or incorporated by reference
in this prospectus or any accompanying prospectus supplement. You must not rely on any unauthorized information or representations
not contained in this prospectus or any accompanying prospectus supplement as if we had authorized it. We are offering to sell,
and seeking offers to buy, shares of securities only in jurisdictions where offers and sales are permitted. This prospectus and
any accompanying prospectus supplement does not constitute an offer to sell or the solicitation of an offer to buy any security
other than the securities offered by this prospectus and any accompanying prospectus supplement, nor does this prospectus or any
accompanying prospectus supplement constitute an offer to sell or the solicitation of an offer to buy securities by anyone in
any jurisdiction in which such offer or solicitation would be unlawful. The information contained in this prospectus and any accompanying
prospectus supplement is accurate only as of the date of this prospectus and any accompanying prospectus supplement, regardless
of the time of delivery of this prospectus, any accompanying prospectus supplement or any sale of securities</B></FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>TABLE
OF CONTENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; width: 95%"><FONT STYLE="font-size: 11pt"><B>PROSPECTUS SUMMARY</B> </FONT></TD>
    <TD STYLE="white-space: nowrap; width: 5%; text-align: right"><FONT STYLE="font-size: 11pt">2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information Regarding the Fund </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Offering </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information Regarding the Adviser and Custodian </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">3</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Closed-End Fund Structure</FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">3</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Focus</FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">3</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summary Risk Factors and Special Considerations</FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>FEES AND EXPENSES</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee Table </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>FINANCIAL HIGHLIGHTS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>PRICE RANGE OF COMMON STOCK</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">10</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share Price Data </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">10</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>USE OF PROCEEDS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">10</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>INVESTMENT OBJECTIVE AND POLICIES</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">11</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Policies - General </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">11</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Leverage Considerations </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">12</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase Agreements </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">14</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt Securities </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">15</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities Lending </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">15</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio Turnover </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">15</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Restrictions </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">16</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>RISK FACTORS AND SPECIAL CONSIDERATIONS&nbsp;&nbsp;&nbsp;&nbsp;</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">17</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risks Related to Offerings Pursuant to this Prospectus </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">17</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discount From Net Asset Value</FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">17</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risks of Investing in Caribbean Basin Countries </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">18</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risks Related to Equity and Equity-Linked Securities</FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">21</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk Relating to Our Adviser and its Affiliates </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">23</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">25</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>MANAGEMENT OF THE FUND</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">26</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board of Directors </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">26</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
    About Directors and Officers </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">26</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk Oversight</FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">27</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Committees
    of the Board </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">28</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ownership
    of the Fund By Directors </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">28</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director
    Compensation </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">29</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Adviser and Portfolio Manager </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">29</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment
    Adviser </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">29</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio
    Managers </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">29</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment Advisory Agreement </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">30</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Benefit to the Adviser </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rights Offerings </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses of the Fund </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>PORTFOLIO TRANSACTIONS AND BROKERAGE</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">32</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>REGULATION AS A REGISTERED CLOSED-END MANAGEMENT INVESTMENT COMPANY</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">32</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">32</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Code of Ethics </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">34</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compliance Policies and Procedures </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">34</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sarbanes-Oxley Act of 2002 </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">34</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proxy Voting Policies and Procedures </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">34</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>DESCRIPTION OF COMMON STOCK</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">34</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share Repurchases and Tender Offers </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">35</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain Provisions of Articles of Incorporation
    and Bylaws </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">36</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subscription Rights </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">37</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">38</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>PLAN OF DISTRIBUTION</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">40</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>TAXATION</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">41</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal Taxation of the Fund and its Distributions </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">42</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>DETERMINATION OF NET ASSET VALUE</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">47</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>CUSTODIAN, TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND REGISTRAR</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">48</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>LEGAL MATTERS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">48</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>EXPERTS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">48</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>FINANCIAL STATEMENTS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">48</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP><FONT STYLE="font-size: 11pt"><B>AVAILABLE INFORMATION</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">48</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt"><B>APPENDIX A</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">A-1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt"><B>APPENDIX B</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 11pt">B-1</FONT></TD></TR>
</TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>PROSPECTUS
SUMMARY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">This summary
highlights some information that is described more fully elsewhere in this prospectus and is qualified in its entirety by the
more detailed information included elsewhere in the prospectus. The summary does not purport to be a complete discussion of all
matters referred to in this prospectus and any accompanying prospectus supplement and may not contain all of the information that
is important to you. To understand an offering fully you should read the entire prospectus and any accompanying prospectus supplement
carefully, including the &ldquo;Risk Factors and Special Consideration,&rdquo; before making a decision to invest in our securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">You
should carefully read the section entitled &quot;Risk Factors and Special Considerations &quot; in this prospectus, any accompanying
prospectus supplement, and our financial statements included in our Annual Report to stockholders for the fiscal year ended June
30, 2017, filed with the SEC on August 29, 2017. References to &quot;fiscal year &quot; mean our applicable fiscal year which
ends on June 30th in such year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white; text-align: justify"><FONT STYLE="font-size: 11pt">Except
where the context requires otherwise, the terms the &quot;Fund, &quot; &quot;we, &quot; &quot;us &quot; and &quot;our &quot; refer
to The Herzfeld Caribbean Basin Fund, Inc. and the &quot;Adviser&quot; refers to HERZFELD/CUBA, a division of Thomas J. Herzfeld
Advisors, Inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Information
Regarding the Fund</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
Herzfeld Caribbean Basin Fund, Inc. is a non-diversified, closed-end management investment company incorporated under the laws
of the State of Maryland that has registered as an investment company under the 1940 Act. The Fund has elected and intends to
continue to qualify annually to be treated as a regulated investment company under the Internal Revenue Code of 1986, as amended,
or the &quot;Code.&quot;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
investment objective is long-term capital appreciation. To achieve its objective, the Fund invests in issuers that are likely,
in the Adviser&rsquo;s view, to benefit from economic, political, structural and technological developments in the countries in
the Caribbean Basin, which include, among others, Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados,
Aruba, Haiti, the former Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica,
Panama, Colombia, the United States and Venezuela, or the &ldquo;Caribbean Basin Countries.&rdquo; The Fund invests at least 80%
of its total assets in equity and equity-linked securities of issuers, including U.S. based companies which engage in substantial
trade with, and derive substantial revenue from, operations in the Caribbean Basin Countries. The Fund may invest more than 25%
of its total assets in the securities of U.S.-based companies, which constituted approximately 56% of the Fund's total assets
as of December 31, 2017. Total assets includes the amount of any borrowings for investment purposes. At such time as it becomes
legally permissible for U.S. entities to invest directly in Cuba, the Fund will consider such investments. See &ldquo;Investment
Objective and Policies.&rdquo; Equity and equity-linked securities include, but are not limited to, common stock, preferred stock,
debt securities convertible into equity, warrants, options and futures. An investment in the Fund is not appropriate for all investors
and should not constitute a complete investment program. No assurances can be given that the Fund&rsquo;s objective will be achieved.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>The Offering</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We may offer,
from time to time, in one or more offerings, our common shares, $0.001 par value per share, or our subscription rights to purchase
our common shares (the &ldquo;Offer&rdquo; or the &ldquo;Offering&rdquo;). The securities may be offered at prices and on terms
to be set forth in one or more supplements to this prospectus (each a &ldquo;prospectus supplement&rdquo;). The offering price
per common share will not be less than the net asset value per common share at the time we make the offering, exclusive of any
underwriting commissions or discounts, provided that rights offerings that meet certain conditions may be offered at a price below
the then current net asset value. See &ldquo;Rights Offerings.&rdquo; You should read this prospectus and the applicable prospectus
supplement carefully before you invest in our securities. Our securities may be offered directly to one or more purchasers, through
agents designated from time to time by us or to or through underwriters or dealers. The prospectus supplement relating to the
offering will identify any agents, underwriters, or dealers involved in the sale of our shares or notes, and will set forth any
applicable purchase price, fee, commission or discount arrangement between us and our agents or underwriters, or among our underwriters,
or the basis upon which such amount may be calculated. The prospectus supplement relating to any offering of subscription rights
will set forth the number of common or preferred shares issuable upon the exercise of each right and the other terms of such rights
offering. We may not sell any of our shares or notes through agents, underwriters or dealers without delivery of a prospectus
supplement describing the method and terms of the particular offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">While the
aggregate amount of securities we may issue pursuant to this registration statement is limited to $88 million, our board of directors
may, without any action by the stockholders, amend our Articles of Incorporation, as amended, from time to time to increase or
decrease the aggregate number of shares or the number of shares of any class or series that we have authority to issue.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Information
Regarding the Adviser and Custodian, Transfer Agent, Dividend Disbursing Agent, and Registrar</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">HERZFELD/CUBA,
a division of Thomas J. Herzfeld Advisors, Inc. has acted as the investment adviser to the Fund since the Fund&rsquo;s registration
under the 1940 Act. Our Investment Advisory Agreement with the Adviser, or the &quot;Investment Advisory Agreement,&quot; sets
forth the services to be provided by the Adviser. The Investment Advisory Agreement was last approved by our board of directors
(the &quot;board of directors&quot; or &quot;board&quot;) on August 10, 2017, and is required to be approved annually by our board.
The Adviser is entitled to an advisory fee paid by the Fund at the annual rate of 1.45% of the Fund&rsquo;s average weekly net
assets and payable at the end of each month. That fee is higher than the advisory fee paid by most investment companies. For the
fiscal years ended June 30, 2017, 2016 and 2015, the Adviser earned $665,528, $560,707, and $558,086, respectively, for investment
advisory services provided to the Fund pursuant to the Investment Advisory Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">See &ldquo;Management
of the Fund - Investment Adviser.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">State Street
Bank and Trust Company acts as custodian for the Fund&rsquo;s assets. State Street Bank and Trust Company also serves as the Fund&rsquo;s
transfer agent, dividend/distribution disbursing agent, dividend reinvestment plan agent and as registrar for the Fund&rsquo;s
common stock. For its services as custodian, the Fund currently pays State Street Bank and Trust Company a monthly fee of $7,000.
For its services as transfer agent, dividend reinvestment plan agent and registrar for the Fund&rsquo;s common stock, the Fund
currently pays State Street Bank and Trust Company a monthly fee of $2,000 plus related expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">See, &ldquo;Custodian, Transfer
Agent, Dividend Disbursing Agent, And Registrar&rdquo;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt"><B>Closed-End
Fund Structure</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
Fund is a non-diversified, closed-end management investment company under the 1940 Act, commonly referred to as a &quot;closed-end
fund.&quot; Closed-end management investment companies differ from open-end management investment companies (commonly referred
to as &quot;mutual funds&quot;) in that closed-end funds generally list their shares for trading on a stock exchange and do not
redeem their stock at the request of the stockholder. This means that if a stockholder wishes to sell shares of a closed-end management
investment company, he or she must trade them on the market, like any other stock, at the prevailing market price at that time.
With respect to a mutual fund, if the stockholder wishes to sell shares of the company, the mutual fund will redeem, or buy back,
the shares at NAV. Mutual funds also generally offer new shares on a continuous basis to new investors, and closed-end management
investment companies generally do not. The continuous inflows and outflows of assets in a mutual fund can make it difficult to
manage the company's investments. By comparison, closed-end management investment companies are generally able to stay more fully
invested in securities that are consistent with their investment objectives and also have greater flexibility to make certain
types of investments and to use certain investment strategies, such as investments in illiquid securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">When
shares of closed-end management investment companies are traded, they may trade at a discount to their NAV. This characteristic
of shares of closed-end management investment companies is a risk separate and distinct from the risk that the closed-end management
investment company's NAV may decrease as a result of investment activities. Our conversion to an open-end mutual fund would require
an amendment to the Fund's articles of incorporation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt"><B>Investment
Focus</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
Fund's investment objective is to obtain long-term capital appreciation. This objective may not be changed without the prior approval
of the holders of a majority of the Fund's outstanding voting securities. As further described below, the Fund pursues its objective
by investing primarily in equity and equity-linked securities of public and private companies, including U.S.-based companies,
(i) whose securities are traded principally on a stock exchange in a Caribbean Basin Country, (ii) that have at least 50% of the
value of their assets in a Caribbean Basin Country or (iii) that derive at least 50% of their total revenue from a Caribbean Basin
Country, which we refer to collectively as &quot;Caribbean Basin Companies.&quot; Current income through receipt of interest or
dividends from the Fund's securities is incidental to the Fund's efforts to attain its investment objective.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
Fund invests in Caribbean Basin Companies that are likely, in the opinion of the Adviser, to benefit from economic, political,
structural and technological developments in the Caribbean Basin Countries. Under normal market conditions, the Fund invests at
least 80% of its total assets in equity and equity-linked securities of Caribbean Basin Companies. This 80% policy may be changed
without stockholder approval upon sixty days written notice to stockholders. Total assets includes the amount of any borrowings
for investment purposes. The Fund may invest more than 25% of its total assets in the securities of U.S.-based companies, which
constituted approximately 56% of the Fund's total assets as of December 31, 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">Investment
in Cuban securities or any investment in Cuba directly or indirectly is currently prohibited under U.S. law. At such time as it
becomes legally permissible for U.S. entities to invest directly in Cuba, the Fund will consider such investments. U.S. law currently
prohibits the Fund from investing its assets in securities of companies that benefit from free trade with Cuba, which we refer
to as &quot;companies strategically linked to Cuba.&quot; Companies strategically linked to Cuba may include a company that benefits
from free trade with Cuba, but does not meet the definition of Caribbean Basin Company set forth above. If permitted to make such
investments upon a lifting or easing of the U.S. trade embargo against Cuba or pursuant to regulations promulgated by a department
or agency of the U.S. Government, the Fund may invest up to 20% of its assets in equity and equity-linked securities of non-Caribbean
Basin Companies strategically linked to Cuba.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
United States re-established diplomatic relations with Cuba and reopened the U.S. embassy in Havana on July 20, 2015. Additionally,
the U.S. Department of the Treasury has issued a series of amendments to the Cuban Assets Control Regulations in 2015 and 2016,
that may facilitate travel to Cuba by U.S. trade delegations and by U.S. citizens who engage in certain commercial activities,
although the future impact that these regulatory changes may have on travel related to possible investment in Cuba or Cuban securities
(if any such investment activities become legally permissible) is not yet clear. There can be no assurances that the U.S. trade
embargo against Cuba will ever be lifted or eased or, if and when such lifting or easing of the embargo commences, that the Adviser
will be able to identify direct investments in issuers domiciled in Cuba that are acceptable for the Fund. If investment in securities
issued by companies domiciled in Cuba were to be permitted under U.S. law, certain risks and special considerations not typically
associated with investing in securities of U.S. companies would be relevant to such securities. These risks include, among others,
restrictions on foreign investment and on repatriation of capital invested in Cuba, unstable currency exchange and fluctuation,
the absence of a capital market structure or market oriented economy, potential price volatility and lesser or lack of liquidity
of shares listed on a securities market (if one is established), continued political and economic risks and other risks described
in &quot;Risk Factors and Special Considerations&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">Equity
securities of public and private companies that may be purchased by the Fund consist of common stock, convertible and non-convertible
preferred stock (whether voting or non-voting), debt with equity warrants and unattached warrants. Debt issued with a warrant
entitles the holder to purchase equity shares and differs from convertible debt because the conversion feature is in the form
of a separately traded warrant. Equity-linked securities of public and private companies that may be purchased by the Fund consist
of debt securities convertible into equity and securities such as warrants, options and futures, the prices of which are functions
of the value of the equity securities receivable upon exercise or settlement thereof.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">We
may invest up to 20% of our assets in non-equity linked debt securities including foreign denominated corporate debt and sovereign
debt issued by foreign governments, their agencies or instrumentalities, or other government-related entities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">For
more information, see &quot;Investment Objective and Policies&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Summary
Risk Factors and Special Considerations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The value
of our assets, as well as the market price of our securities, will fluctuate. Our investments may be risky, and you may lose all
or part of your investment in us. For additional information about the risks associated with investing in the Fund&rsquo;s common
stock, see &ldquo;Risk Factors and Special Considerations.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
is a non-diversified, closed-end investment company designed primarily as a long-term investment and not as a trading tool. The
Fund invests generally in a portfolio of Caribbean Basin Companies. An investment in the Fund should be considered speculative
and involves a high degree of risk. The Fund&rsquo;s shares do not represent a deposit or obligation of, and are not guaranteed
or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any governmental agency.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">Risks
that you should carefully consider before investing in our securities include, but are not limited to, the following:</FONT></P>



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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; padding-bottom: 6pt; text-align: justify"><FONT STYLE="font-size: 11pt"><B><I>Discount From NAV</I></B></FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 68%; padding-bottom: 8pt; text-align: justify"><FONT STYLE="font-size: 11pt">Shares of closed-end funds
    frequently trade at a market price that is less than the value of the net assets attributable to those shares (a &ldquo;discount&rdquo;).
    The possibility that the Fund&rsquo;s shares will trade at a discount from NAV is a risk separate and distinct from the risk
    that the Fund&rsquo;s NAV will decrease. The risk of purchasing shares of a closed-end fund that might trade at a discount
    or unsustainable premium is more pronounced for investors who wish to sell their shares in a relatively short period of time
    after purchasing them because, for those investors, realization of a gain or loss on their investments is likely to be more
    dependent upon the existence of a premium or discount than upon portfolio performance.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify"><FONT STYLE="font-size: 11pt"><B><I>Caribbean Basin Countries</I></B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 8pt; text-align: justify"><FONT STYLE="font-size: 11pt">Investing in the securities of non-U.S.
    issuers involves certain risks and considerations not typically associated with investing in securities of U.S. issuers. These
    risks include currency fluctuations, political and economic risks, including nationalization and expropriation, reduced levels
    of publicly available information concerning issuers and reduced levels of government regulation of foreign securities markets.
    Also, investment in Caribbean Basin Countries may involve special considerations, such as limited liquidity and small market
    capitalization of the Caribbean Basin securities markets, currency devaluations, high inflation and repatriation restrictions.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify"><FONT STYLE="font-size: 11pt"><B><I>Equity and Equity-Linked Securities
    Risk</I></B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Consistent
        with its objective, the Fund invests a substantial portion of its assets in equity securities of Caribbean Basin Companies.
        Equity securities, such as common stock, generally represent an ownership interest in a company. An adverse event, such
        as an unfavorable earnings report, may depress the value of a particular equity security held by the Fund. Also, the prices
        of equity securities, particularly common stocks, are sensitive to general movements in the stock market. The Fund&rsquo;s
        share price can fall because of weakness in the markets in which it invests, a particular industry or specific holdings.
        Markets as a whole can decline for many reasons, including adverse political or economic developments, changes in investor
        psychology, or heavy institutional selling. The prospects for an industry or company may deteriorate because of a variety
        of factors, including disappointing earnings or changes in the competitive environment. Investments in futures and options,
        if any, are subject to additional volatility and potential losses.</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The
        Fund may also invest in preferred stock, convertible securities and other types of equity-linked securities. The market
        value of preferred and convertible securities and other debt securities tends to fall when prevailing interest rates rise.
        Preferred securities may pay fixed or adjustable rates of return. Preferred securities are subject to issuer-specific
        and market risks applicable generally to equity securities. In addition, a company&rsquo;s preferred securities generally
        pay dividends only after the company makes required payments to holders of its bonds and other debt. For this reason,
        the value of preferred securities will usually react more strongly than bonds and other debt to actual or perceived changes
        in the company&rsquo;s financial condition or prospects. Preferred securities of smaller companies may be more vulnerable
        to adverse developments than preferred stock of larger companies. The market value of a convertible security performs
        like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security usually
        falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest or
        dividends when due, and their market value may change based on changes in the issuer&rsquo;s credit rating or the market&rsquo;s
        perception of the issuer&rsquo;s creditworthiness. Since it derives a portion of its value from the common stock into
        which it may be converted, a convertible security is also subject to the same types of market and issuer risks that apply
        to the underlying common stock. Equity-linked securities bear the risk that, in addition to market risk and other risks
        of the referenced equity security, the Fund may experience a return that is different from that of the referenced equity
        security. Equity-linked instruments also subject the Fund to counterparty risk, including the risk that the issuing entity
        may not be able to honor its financial commitment, which could result in a loss of all or part of the Fund&rsquo;s investment.</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P></TD></TR>
</TABLE>


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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; padding-bottom: 6pt"><FONT STYLE="font-size: 11pt"><BR STYLE="clear: both">
    <B><I>Cuba Specific Issues</I></B></FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 68%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Investment
        in Cuban securities or any investment in Cuba directly or indirectly is currently prohibited under U.S. law. There can
        be no assurances that the U.S. trade embargo against Cuba will ever be lifted or eased or, if and when such a normalization
        commences, that the Adviser will be able to identify direct investments in issuers domiciled in Cuba that are acceptable
        for the Fund.</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">However,
        if investment in securities issued by companies domiciled in Cuba were to be permitted under U.S. law, certain considerations
        not typically associated with investing in securities of U.S. companies should be considered, including: (1) restrictions
        on foreign investment and on repatriation of capital invested in Cuba; (2) unstable currency exchange and fluctuation;
        (3) the cost of converting foreign currency into U.S. Dollars; (4) potential price volatility and lesser or lack of liquidity
        of shares listed on a securities market (if one is established); (5) continued political and economic risks including
        a new government that if not properly stabilized may lead to the risk of nationalization or expropriation of assets and
        the risk of civil war; (6) the absence of a developed legal structure governing private property; (7) the absence of a
        capital market structure or market oriented economy; and (8) the difficulty of assessing the financial status of particular
        companies.</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><FONT STYLE="font-size: 11pt"><B><I>&ldquo;Non-diversified&rdquo; Investment Company</I></B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify"><FONT STYLE="font-size: 11pt">As a &ldquo;non-diversified&rdquo; investment
    company, the Fund&rsquo;s investments involve greater risks than would be the case for a similar diversified investment company
    because the Fund is not limited by the Investment Company Act of 1940, as amended (the &ldquo;1940 Act&rdquo;), in the proportion
    of its assets that may be invested in the assets of a single issuer. Although the Fund is not diversified for the purposes
    of the 1940 Act, it must maintain a certain degree of diversification in order to comply with certain requirements of the
    Code, applicable to regulated investment companies. See &ldquo;Risk Factors/Special Considerations&rdquo; and &ldquo;Taxation.&rdquo;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><FONT STYLE="font-size: 11pt"><B><I>Management Risk</I></B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify"><FONT STYLE="font-size: 11pt">The Adviser&rsquo;s judgment about the
    attractiveness, relative value or potential appreciation of a particular security or investment strategy may prove to be incorrect.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><FONT STYLE="font-size: 11pt"><B><I>Dividends and Distributions</I></B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">The Fund distributes annually to its stockholders substantially all of its net investment income and net short-term capital gains. The Fund determines annually whether to distribute any net realized long-term capital gains in excess of net realized short-term capital losses. We paid annual distributions to our common stockholders in fiscal year 2017 of $0.13496 per share and in fiscal year 2016 of $0.16 per share. See &ldquo;Dividends and Distributions: Dividend Reinvestment Plan&rdquo; and &ldquo;Taxation.&rdquo;</FONT></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><FONT STYLE="font-size: 11pt"><B><I>Plan of Distribution</I></B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">We may offer, from time to time, up to $88 million of our securities, on terms to be determined at the time of each such offering and set forth in a supplement to this prospectus.</FONT></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Securities may be offered at prices and on terms described in one or more supplements to this prospectus. We may sell our securities through underwriters or dealers, &ldquo;at-the-market&rdquo; to or through a market maker, into an existing trading market or otherwise directly to one or more purchasers or through agents or through a combination of methods of sale. The supplement to this prospectus relating to an offering will identify any agents or underwriters involved in the sale of our securities, and will set forth any applicable purchase price, fee and commission or discount arrangement or the basis upon which such amount may be calculated. In compliance with the guidelines of the Financial Industry Regulatory Authority, Inc., or FINRA, the compensation to the underwriters or dealers in connection with the sale of our securities pursuant to this prospectus and the accompanying supplement to this prospectus may not exceed 8% of the aggregate offering price of the securities as set forth on the cover page of the supplement to this prospectus. </FONT></P></TD></TR></TABLE>



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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify"><FONT STYLE="font-size: 11pt">We may not sell securities pursuant to
    this prospectus without delivering a prospectus supplement describing the terms of the particular securities to be offered
    and the method of an offering of such securities. See &ldquo;Plan of Distribution&rdquo;.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; width: 30%"><FONT STYLE="font-size: 11pt"><B><I>Certain Charter Provisions</I></B></FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; width: 68%"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s Articles of Incorporation,
    as amended, include provisions that could have the effect of: inhibiting the Fund&rsquo;s possible conversion to open-end
    status; limiting the ability of other entities or persons to acquire control of the Fund or to change the composition of its
    board; and depriving stockholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging
    a third party from seeking to obtain control of the Fund. See &ldquo;Description of Common Stock.&rdquo;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><FONT STYLE="font-size: 11pt"><B><I>Market Disruption Risk</I></B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify"><FONT STYLE="font-size: 11pt">Certain events have had a disruptive effect
    on the securities markets, such as terrorist attacks, war and other geopolitical events, hurricanes, droughts, floods and
    other disasters. The Fund cannot predict the effects of similar events in the future on the markets or economies of Caribbean
    Basin Countries.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
risks and special considerations discussed above apply generally to the investments and strategies that the Adviser will use under
normal market conditions. The Fund and the Adviser also may use other strategies and engage in other investment practices. For
more information about the risks described above and other risks, see &quot;Risk Factors and Special Considerations&quot; and,
risks and special considerations discussed in any accompanying prospectus supplement. In addition, the other information included
in this prospectus and any accompanying prospectus supplement contains a discussion of factors you should carefully consider before
deciding to invest in shares of our common stock.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt"><B>FEES
AND EXPENSES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
following table is intended to assist you in understanding the costs and expenses that you will bear directly or indirectly. We
caution you that some of the percentages indicated in the table below are estimates and may vary. Except where the context suggests
otherwise, whenever this prospectus and any accompanying prospectus supplement contains a reference to fees or expenses paid by
&quot;us&quot; or the Fund or that &quot;we&quot; will pay fees or expenses, you will indirectly bear such fees or expenses as
an investor in the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; width: 85%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Fee Table</B></FONT></TD>
    <TD STYLE="white-space: nowrap; width: 15%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt"><I>Stockholder Transaction Expenses:</I></FONT></TD>
    <TD STYLE="white-space: nowrap"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Sales load (as a percentage of the offering price) (1) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Offering expenses borne by us (1) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Dividend reinvestment plan fees </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">None</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholder transaction
    expenses (as a percentage of offering price)</FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify; width: 85%"><FONT STYLE="font-size: 11pt"><I>Annual Expenses (as a percentage of net assets attributable
    to common shares):</I></FONT></TD>
    <TD STYLE="white-space: nowrap; width: 15%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Management Fees </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">1.45%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Other expenses (estimated) (2) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">1.03%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Acquired fund fees and expenses (3)</FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">0.00%</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD COLSPAN="2"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; padding-left: 20pt; text-align: justify"><FONT STYLE="font-size: 11pt">Total Annual Expenses (estimated)
    (4) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">2.48%</FONT></TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">To be
                                         provided by amendment. The actual amounts in connection with any offering will be set
                                         forth in the prospectus supplement if applicable.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&ldquo;Other
                                         Expenses&rdquo; do not include expenses of the Fund incurred in connection with any Offer.
                                         However, these expenses will be borne by the holders of the shares of common stock of
                                         the Fund and result in a reduction in the net asset value, or &ldquo;NAV&rdquo;, of the
                                         shares of common stock.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Includes
                                         fees and expenses of approximately 0.00% incurred indirectly as a result of investment
                                         in shares of one or more &ldquo;Acquired Funds,&rdquo; which include (i) investment companies,
                                         or (ii) companies that would be an investment company under Section 3(a) of the 1940
                                         Act except for exceptions under Sections 3(c)(1) and 3(c)(7) under the 1940 Act.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Total
                                         Annual Expenses may not correlate to the ratio of expenses to average net assets disclosed
                                         in the Fund&rsquo;s annual and semi-annual reports to stockholders in the financial highlights
                                         table, which reflects operating expenses of the Fund and does not include &ldquo;Acquired
                                         Fund&rdquo; fees and expenses.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Example</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The following
example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with
respect to a hypothetical investment in our common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD  COLSPAN="7" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Cumulative
    Expenses Paid for the Period of:</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">1 year</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">3 years</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">5 years</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">10 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 11pt">An investor
    would pay the following expenses on a $1,000     investment,<BR>
 assuming a 5% annual return:</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$25</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$77</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$132</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$282</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>The example
and the expenses in the tables above should not be considered a representation of past or future expenses or annual rates of return
and actual expenses or annual rates of return may be more or less than those shown.</B> The foregoing table and example are intended
to assist investors in understanding the costs and expenses that an investor in the Fund will bear directly or indirectly. &ldquo;Other
Expenses&rdquo; are based on estimated amounts for the current fiscal year. See &ldquo;Management of the Fund&rdquo; for additional
information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The example
assumes the reinvestment of all dividends and distributions at NAV and an expense ratio of 2.48%. The tables above and the assumption
in the example of a 5% annual return are required by SEC regulations applicable to all investment companies. In addition, while
the example assumes the reinvestment of all dividends and distributions at NAV, participants in the Dividend Reinvestment Plan
may receive shares purchased or issued at a price or value different from NAV. See &ldquo;Dividends and Distributions; Dividend
Reinvestment Plan.&rdquo;</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">F<B>INANCIAL
HIGHLIGHTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The table
below sets forth selected data for a share of common stock outstanding for each period presented. The information for the fiscal
years ended June 30, 2017, and 2016 has been audited by Tait Weller, the Fund&rsquo;s independent registered public accounting
firm. The information for the fiscal years ended June 30, 2015, 2014, and 2013 contained in the table was audited by the Fund&rsquo;s
former independent registered public accounting firms. Audited financial statements for the Fund for the fiscal year ended June
30, 2017, are included in the Annual Report to stockholders. The Annual Report to stockholders is available without charge by
calling (800) TJH-FUND.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 11pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD ROWSPAN="2" COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Six
                                                                                               Months Ended 12/31/17 unaudited</TD><TD STYLE="font-size: 10pt; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="19" STYLE="font-size: 10pt; text-align: center; vertical-align: bottom; border-top: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><B>Year
Ended June 30,&nbsp;</B></FONT></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 10pt; text-indent: -10pt">Per Share Operating Performance</TD><TD></TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">(For a share of capital stock outstanding for each year)</TD><TD></TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="width: 25%; text-align: justify; padding-left: 10pt; text-indent: -10pt">Net asset value, beginning of year</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">8.32</TD><TD STYLE="width: 4%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">6.47</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">7.43</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">9.12</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">9.28</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">7.90</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Operations:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 11pt">Net investment loss<SUP>(1)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.05</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.14</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.07</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.11</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.07</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.03</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Net realized and unrealized gain (loss) on investment transactions</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.80</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.08</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.05</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.61</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Total from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.14</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.98</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.87</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.19</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.98</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.58</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Distributions:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">From net realized gains</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.12</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.13</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.16</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.64</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.14</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.20</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Total distributions</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.12</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.13</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.16</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.64</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.14</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.20</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Dilutive effect of rights offering</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.86</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Accretive effect of ATM offering</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.07</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Accretive effect of shares in reinvestment of distribution</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.00</TD><TD STYLE="text-align: left"><SUP>(2)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.00</TD><TD STYLE="text-align: left"><SUP>(2)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Net asset value, end of year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8.34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8.32</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.47</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7.43</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9.12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9.28</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Per share market value, end of year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7.15</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7.20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.11</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9.46</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8.15</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8.51</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Total investment return (loss) based on market value per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.69</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20.17</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(33.73</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.40</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.98</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.31</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Ratios And Supplemental Data</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Net assets, end of year (in 000&rsquo;s)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">51,170</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">51,047</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">39,669</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">41,611</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">33,862</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">34,445</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Ratio of expenses to average net assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.48</TD><TD STYLE="text-align: left">%<SUP>(3)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.36</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.20</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.97</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.46</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.50</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Ratio of net investment loss to average net assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.09</TD><TD STYLE="text-align: left">%)<SUP>(3)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.86</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.99</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.36</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.78</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.38</TD><TD STYLE="text-align: left">%)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt">Portfolio turnover rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; border-bottom: Black 1pt solid; text-indent: -10pt">Average commission rate (per share)*</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.0060</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.0058</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.0064</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.0075</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.0075</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.009</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"></FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 20%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(1)</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Computed by dividing the respective year&rsquo;s
    amounts from the Statement of Operations by the average outstanding shares for each year presented.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">(2)</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Amount less than $0.01.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP><FONT STYLE="font-size: 11pt">(3)</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">This figure has been annualized; however, the percentage
    shown is not necessarily indicative of results for a full year. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">*</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Unaudited.</FONT></TD></TR>
</TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt"><B>PRICE
RANGE OF COMMON STOCK</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The following
table sets forth, for the periods indicated, the high and low sales prices for the shares on the NASDAQ Capital Market, the NAVs
per share on the dates of the high and low sales prices, and the discount or premium that each sales price represented as a percentage
of the preceding NAV:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Share
Price Data </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center; width: 15%; vertical-align: bottom"><FONT STYLE="font-size: 11pt">Quarter Ended</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center; width: 15%; vertical-align: bottom"><FONT STYLE="font-size: 11pt">High </FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center; width: 15%; vertical-align: bottom"><FONT STYLE="font-size: 11pt">NAV (on High
    Date)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center; width: 15%; vertical-align: bottom"><FONT STYLE="font-size: 11pt">Premium/ (Discount) (on
    High Date)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center; width: 15%; vertical-align: bottom"><FONT STYLE="font-size: 11pt">Low </FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center; width: 15%; vertical-align: bottom"><FONT STYLE="font-size: 11pt">NAV (on Low
    Date)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center; width: 10%; vertical-align: bottom"><FONT STYLE="font-size: 11pt">Premium/ (Discount) (on
    Low Date)</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">3/31/2018</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.54</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$9.00</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-16.22%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.80</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$8.33</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-18.38%</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">12/31/2017</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.35</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$8.53</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-13.83%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.73</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$8.10</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-16.91%</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">9/30/2017</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.46</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$8.47</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-11.92%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.87</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$8.32</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-17.43%</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">6/30/2017</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.25</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$8.19</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-11.49%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.85</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.92</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-13.51%</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">3/31/2017</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.10</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.93</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-10.47%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.40</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.41</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-13.63%</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">12/31/2016</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.47</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.41</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">0.81%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.02</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.20</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-16.38%</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">9/30/2016</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.49</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.07</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-8.20%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$5.99</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.68</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-10.33%</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">6/30/2016</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.16</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.59</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">8.65%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.80</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.14</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-5.54%</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">3/31/2016</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$8.49</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.69</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">26.91%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$4.72</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$5.61</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-15.86%</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">12/31/2015</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.59</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.09</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">7.05%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.27</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.53</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">-3.98%</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">9/30/2015</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$10.75</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$7.43</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">44.68%</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.77</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">$6.52</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">3.83%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Our common
stock has historically traded at a premium or at a discount to its NAV. We cannot predict whether our common stock will trade
at a premium or discount to NAV in the future. In recognition of the possibility that the Fund&rsquo;s shares might trade at a
discount to NAV, our board of directors may determine that it would be in the best interest of stockholders of the Fund to take
action to attempt to reduce or eliminate a market value discount from NAV. To that end, the board may take action from time to
time either to repurchase Fund shares in open market or private transactions or to make a tender offer for Fund shares at NAV.
No assurance can be given that the board will decide to undertake such repurchases or tender offers, or that any such repurchases
or tender offers would reduce any market discount. The board does not currently intend to undertake repurchases or tenders offers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">See also,
&ldquo;Description of Common Stock - Share Repurchases and Tender Offers&rdquo;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>USE OF
PROCEEDS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Unless otherwise
specified in a prospectus supplement, we intend to use all or substantially all of the net proceeds from a sale of our securities,
pursuant to a prospectus supplement, if any, for acquiring investments in accordance with our investment objective and policies
described in this prospectus and any accompanying prospectus supplement and for general corporate purposes. The Adviser anticipates
that such proceeds, if received, will be invested promptly as investment opportunities are identified, depending on market conditions
and the availability of appropriate securities, which we anticipate will take not more than approximately three to six months
from the closing of any offering. Pending investment, the proceeds will be invested in short-term cash-equivalent instruments.
Although the Adviser anticipates that a substantial portion of the proceeds from any offering will be invested pursuant to the
Fund&rsquo;s investment objective and policies, some of the proceeds may be used to make capital gain distributions required to
maintain the Fund&rsquo;s tax status as a regulated investment company.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>INVESTMENT
OBJECTIVE AND POLICIES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Investment
Policies - General</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
investment objective is to obtain long-term capital appreciation. This objective may not be changed without the prior approval
of the holders of a majority of the Fund&rsquo;s outstanding voting securities. The Fund pursues its objective by investing primarily
in equity and equity-linked securities of public and private companies, including U.S.-based companies, (i) whose securities are
traded principally on a stock exchange in a Caribbean Basin country, (ii) that have at least 50% of the value of their assets
in a Caribbean Basin Country or (iii) that derive at least 50% of their total revenue from operations in a Caribbean Basin country
(collectively referred to herein as &ldquo;Caribbean Basin Companies&rdquo;). Current income through receipt of interest or dividends
from the Fund&rsquo;s securities is incidental to the Fund&rsquo;s efforts to attain its investment objective. The Fund invests
in Caribbean Basin Companies that are likely, in the opinion of the Adviser, to benefit from political, legal and economic developments
in the Caribbean Basin Countries. Under normal market conditions, the Fund invests at least 80% of its total assets in equity
and equity-linked securities of Caribbean Basin Companies, including U.S.-based companies which engage in substantial trade with,
and derive substantial revenue from, operations in the Caribbean Basin Countries. Total assets includes the amount of any borrowings
for investment purposes. The Fund may invest more than 25% of its total assets in the securities of U.S.-based companies. U.S.
law currently prohibits the Fund from investing its assets in securities of companies that benefit from free trade with Cuba (&ldquo;companies
strategically linked to Cuba&rdquo;). Companies strategically linked to Cuba may include a company that benefits from free trade
with Cuba, but does not meet the definition of Caribbean Basin Company set forth above. If permitted to make such investments
upon a lifting or easing of the U.S. trade embargo against Cuba or pursuant to regulations promulgated by a department or agency
of the U.S. Government, the Fund may invest up to 20% of its assets in equity and equity-linked securities of non-Caribbean Basin
Companies strategically linked to Cuba.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
investment objective is fundamental and may not be changed without the approval of the Fund&rsquo;s outstanding voting securities.
As used in this prospectus, a majority of the Fund&rsquo;s outstanding voting securities means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are present in person or represented by proxy or (ii)
more than 50% of the outstanding shares. The Fund&rsquo;s investment policies may be changed by its board without stockholder
approval, but the Fund will not change its investment policies without notice to its stockholders. The Fund is designed primarily
for long-term investment, and investors should not consider it a trading vehicle. An investment in the Fund&rsquo;s shares should
not constitute a complete investment program. The Fund&rsquo;s NAV can be expected to fluctuate, and no assurance can be given
that the Fund will continue to achieve its investment objective.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Equity securities
of public and private companies that may be purchased by the Fund consist of common stock, convertible and non-convertible preferred
stock (whether voting or non-voting), debt with equity warrants and unattached warrants. Debt issued with a warrant entitles the
holder to purchase equity shares and differs from convertible debt because the conversion feature is in the form of a separately
traded warrant. Equity-linked securities of public and private companies that may be purchased by the Fund consist of debt securities
convertible into equity and securities such as warrants, options and futures, the prices of which are functions of the value of
the equity securities receivable upon exercise or settlement thereof.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may also invest in the shares of other registered investment companies, some of which may be Caribbean Basin Companies. By investing
in shares of investment companies, the Fund would indirectly pay a portion of the operating expenses, management expenses and
brokerage costs of such companies as well as the expense of operating the Fund. Thus, the Fund&rsquo;s investors may indirectly
pay higher total operating expenses and other costs than they might pay by owning the underlying investment companies directly.
The Adviser will continue to attempt to identify investment companies that have demonstrated superior management in the past,
thus possibly offsetting these factors by producing better results and/or lower expenses than other investment companies. There
can be no assurance that this result will continue to be achieved. In addition, Section 12(d)(1)(A) of the 1940 Act imposes limits
on the amount of the investment of the Fund&rsquo;s assets, and those of its affiliates, in any investment company and that provision
may adversely affect the Fund&rsquo;s ability to purchase or redeem shares issued by an investment company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may invest in securities that lack an established secondary trading market or otherwise are considered illiquid. Liquidity of
a security relates to the ability to dispose easily of the security and the price to be obtained upon disposition of the security,
which may be less than would be obtained for a comparable more liquid security. Illiquid securities may trade at a discount from
comparable, more liquid investments. Investment of the Fund&rsquo;s assets in illiquid securities may restrict the ability of
the Fund to dispose of its investments in a timely fashion and for a fair price as well as its ability to take advantage of market
opportunities. The risks associated with illiquidity will be particularly acute where the Fund&rsquo;s operations require cash,
such as when the Fund redeems shares or pays a distribution, and could result in the Fund borrowing to meet short-term cash requirements
or incurring capital losses on the sale of illiquid investments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may invest in securities that are not registered under the Securities Act (&ldquo;restricted securities&rdquo;). Restricted securities
may be sold in private placement transactions between issuers and their purchasers and may be neither listed on an exchange nor
traded in other established markets. In many cases, privately placed securities may not be freely transferable under the laws
of the applicable jurisdiction or due to contractual restrictions on resale. As a result of the absence of a public trading market,
privately placed securities may be less liquid and more difficult to value than publicly traded securities. To the extent that
privately placed securities may be resold in privately negotiated transactions, the prices realized from the sales, due to illiquidity,
could be less than those originally paid by the Fund or less than their fair market value. In addition, issuers whose securities
are not publicly traded may not be subject to the disclosure and other investor protection requirements that may be applicable
if their securities were publicly traded. If any privately placed securities held by the Fund are required to be registered under
the securities laws of one or more jurisdictions before being resold, the Fund may be required to bear the expenses of registration.
Certain of the Fund&rsquo;s investments in private placements may consist of direct investments and may include investments in
smaller, less seasoned issuers, which may involve greater risks. These issuers may have limited product lines, markets or financial
resources, or they may be dependent on a limited management group. In making investments in such securities, the Fund may obtain
access to material nonpublic information, which may restrict the Fund&rsquo;s ability to conduct portfolio transactions in such
securities.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Temporary
Defensive Positions</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may vary its investment policy for temporary defensive purposes when, in the opinion of the Adviser, such a change is warranted
due to changes in the securities markets in which the Fund may invest or other economic or political conditions affecting such
markets. For temporary defensive purposes, the Fund may reduce its position in equity and equity-linked securities and invest
in U.S. Treasury bills and U.S. Dollar denominated bank time deposits and certificates of deposit rated high quality or better
by any nationally recognized statistical rating service or, if unrated, of equivalent investment quality as determined by the
Adviser. The banks whose obligations may be purchased by the Fund will include any member of the U.S. Federal Reserve System.
The Fund does not seek to achieve its stated investment objective when it has assumed a temporary defensive position.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Special
Leverage Considerations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Hedging
Transactions</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may employ one or more of the hedging techniques described below, primarily to protect against a decrease in the U.S. Dollar equivalent
value of its portfolio securities denominated in foreign currencies or in the payments thereon that may result from an adverse
change in foreign currency exchange rates. Conditions in the securities, futures, options and foreign currency markets will continue
to determine whether and under what circumstances the Fund will employ any of the techniques or strategies described below. The
Fund&rsquo;s ability to pursue certain of these strategies may be limited by applicable regulations of the Commodity Futures Trading
Commission (&ldquo;CFTC&rdquo;) and the Federal tax requirements applicable to regulated investment companies. See &ldquo;Taxation.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Pursuant
to applicable law and subject to certain restrictions, the Fund may effect hedging transactions on a variety of U.S. and foreign
exchanges. The operations of U.S. exchanges are considered to be subject to more stringent regulation and supervision than those
of certain non-U.S. exchanges.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">If any percentage
limitations applicable to the transactions described below are exceeded due to market fluctuations after an initial investment,
the Fund may not enter into new transactions of the type to which the exceeded limitation applies until the total of the Fund&rsquo;s
commitments with respect to such transactions falls within the applicable limitation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Forward
Foreign Currency Exchange Contracts</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Adviser
believes that in some circumstances the purchase and sale of forward foreign currency exchange contracts (&ldquo;forward contracts&rdquo;)
may help offset declines in the U.S. Dollar equivalent value of the Fund&rsquo;s assets denominated in foreign currencies and
in the income available for distribution to the Fund&rsquo;s stockholders that would result from adverse changes in the exchange
rate between the U.S. Dollar and such foreign currencies. For example, the U.S. Dollar equivalent value of the principal of and
rate of return on, the Fund&rsquo;s foreign denominated securities will decline if the exchange rate fluctuates between the U.S.
Dollar and such foreign currency whereby the U.S. Dollar increases in value. Such a decline could be partially or completely offset
by an increase in the value of a foreign currency forward contract. The Fund may purchase forward contracts involving either the
currencies in which certain of its portfolio securities are denominated or, in cross-hedging transactions, other currencies, changes
in the value of which correlate closely with the changes in the value of the currencies in which its portfolio securities are
denominated. The Fund will enter into such cross-hedging transactions (i) only with respect to currencies whose foreign exchange
rate changes historically have shown a high degree of correlation to changes in the foreign exchange rate of the currency in which
the hedged asset is denominated (a &ldquo;correlated currency&rdquo;) and (ii) only when the Adviser believes that the increase
in correlation risk is offset by the lower transaction costs and increased liquidity available for financial instruments denominated
in the correlated currency.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may enter into forward contracts or maintain a net exposure on such contracts only if (i) the consummation of the contracts would
not obligate the Fund to deliver an amount of foreign currency in excess of the value of the Fund&rsquo;s portfolio securities
or other assets denominated in that currency or (ii) the Fund maintains cash, U.S. Government securities or other liquid, high-grade
debt securities in a segregated account in an amount not less than the value of the Fund&rsquo;s total assets committed to the
consummation of the contract.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Although
the use of forward contracts may protect the Fund against declines in the U.S. Dollar equivalent value of the Fund&rsquo;s assets,
such use may reduce the possible gain from advantageous changes in the value of the U.S. Dollar against particular currencies
in which the Fund&rsquo;s assets are denominated. Moreover, the use of forward contracts will not eliminate fluctuations in the
underlying U.S. Dollar equivalent value of the prices of, or rates of return on, the assets held in the Fund&rsquo;s portfolio.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The use
of forward contracts subjects the Fund to certain risks. The matching of the increase in value of a forward contract and the decline
in the U.S. Dollar equivalent value of the asset that is the subject of the hedge generally is not precise. The success of any
of these techniques depends on the ability of the Adviser to predict correctly movements in foreign currency exchange rates. If
the Adviser incorrectly predicts the direction of such movements or if unanticipated changes in foreign currency exchange rates
occur, the Fund&rsquo;s performance may be poorer than if it had not entered into such contracts. The cost to the Fund of engaging
in forward contracts varies with such factors as the foreign currency involved, the length of the contract period and the prevailing
market conditions, including general market expectations as to the direction of the movement of various foreign currencies against
the U.S. Dollar. Consequently, because the Fund may not always be able to enter into forward contracts at attractive prices, it
may be limited in its ability to use such contracts to hedge its assets or for other risk management purposes. In addition, there
can be no assurance that historical correlations between the movements of certain foreign currencies relative to the U.S. Dollar
will continue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Options
on Foreign Currencies</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may purchase and write put and call options on foreign currencies to protect against a decline in the U.S. Dollar equivalent value
of its portfolio securities or payments due thereon or a rise in the U.S. Dollar equivalent cost of securities that it intends
to purchase. A foreign currency put option grants the holder the right, but not the obligation, at a future date to sell a specified
amount of a foreign currency to its counterparty at a predetermined price. A foreign currency call option grants the holder the
right, but not the obligation, to purchase at a future date a specified amount of a foreign currency at a predetermined price.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">As in the
case of other types of options, the benefit to the Fund from purchases of foreign currency options will be reduced by the amount
of the premium and related transaction costs. In addition, if currency exchange rates do not move in the direction or to the extent
anticipated, the Fund could sustain losses on transactions in foreign currency options which would require it to forego a portion
or all of the benefits of advantageous changes in such rates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Any options
on foreign currencies written by the Fund will be covered. A call option is &ldquo;covered&rdquo; if the Fund owns the underlying
foreign currency covered by the call or has an absolute and immediate right to acquire that foreign currency without additional
cash consideration (or for additional cash consideration held in a segregated account by its custodian) upon conversion or exchange
of other foreign currency held in its portfolio. A call option is also covered if the Fund has a call on the same foreign currency
and in the same principal amount as the call written, so long as the exercise price of the call held (i) is equal to or less than
the exercise price of the call written or (ii) is greater than the exercise price of the call written if the difference is maintained
by the Fund in cash, U.S. government securities or other liquid, high-grade debt securities in a segregated account with its custodian.
The Fund covers any put option it writes on foreign currencies by holding with its custodian, in a segregated account, cash, U.S.
government securities or other liquid, high-grade debt securities in an amount equal to the option price.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may not purchase or write options on foreign currencies if, as a result, the Fund will have more than 20% of the value of its
total assets invested in, or at risk with respect to, such options.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Futures
Contracts</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may enter into contracts for the purchase or sale for future delivery (&ldquo;futures contracts&rdquo;) of foreign stock or bond
indices or other financial indices that the Adviser and the Manager determine are appropriate to hedge the risks associated with
changes in interest rates or general fluctuations in the value of the Fund&rsquo;s portfolio securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Pursuant
to the regulations of the CFTC, and subject to certain restrictions, the Fund may purchase or sell futures contracts that are
traded on U.S. exchanges that have been designated as contract markets by the CFTC. The Fund may also generally purchase or sell
futures contracts that are subject to the rules of any foreign board of trade (&ldquo;foreign futures contracts&rdquo;). The Fund
may not, however, trade a foreign futures contract based on a foreign stock index unless the contract has been approved by the
CFTC for trading by U.S. persons.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
is required to make a margin deposit in cash or government securities with a broker or custodian to initiate and maintain positions
in futures contracts. Minimal initial margin requirements are established by the futures exchange and brokers may establish margin
requirements which are higher than the exchange requirements. After a futures contract position is opened, the value of the contract
is marked to market daily. If the futures contract price changes to the extent that the margin on deposit does not satisfy margin
requirements, payment of additional &ldquo;variation&rdquo; margin is required. Conversely, reduction in the contract value may
reduce the required margin resulting in a repayment of excess margin to the Fund. Variation margin payments are made to and from
the futures broker for as long as the contract remains open.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Notwithstanding
the foregoing, the Fund will generally only purchase or sell futures contracts (including foreign currency exchange contracts),
or options thereon, for bona fide hedging purposes, as defined in applicable CFTC regulations. If the Fund purchases or sells
such futures contracts (including foreign currency exchange contracts), or options thereon for purposes other than bona fide hedging
transactions, in accordance with CFTC regulations, the Fund will in no event purchase or sell futures contracts if immediately
thereafter the sum of the amounts of initial margin deposits and premiums on the Fund&rsquo;s existing futures contracts would
exceed 5% of the fair market value of the Fund&rsquo;s total assets. The Adviser reserves the right to comply with such different
standards as may be established by the CFTC with respect to the purchase or sale of futures contracts and foreign futures contracts.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Options
on Securities and Options on Indices</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may purchase or sell exchange traded or over-the-counter put and call options on its portfolio securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may write covered put and call options on portfolio securities to generate additional revenue for the Fund and, in certain circumstances,
as a partial hedge (to the extent of the premium received less transaction costs) against a decline in the value of portfolio
securities and in circumstances in which the Adviser anticipates that the price of the underlying securities will not increase
above or fall below (in the case of put options) the exercise price of the option by an amount greater than the premium received
(less transaction costs incurred) by the Fund. Although writing put and call options may generate additional revenue for the Fund,
such revenue is incidental to the Fund&rsquo;s efforts to achieve its investment objective. The Fund&rsquo;s strategy limits potential
capital appreciation in the portfolio securities subject to the options.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may write only covered options. &ldquo;Covered&rdquo; means that, so long as the Fund is obligated as the writer of a call option,
it will own either the underlying securities or an option to purchase the same underlying securities having an expiration date
not earlier than the expiration date of the covered option and an exercise price equal to or less than the exercise price of the
covered option, or establish or maintain with its custodian for the term of the option a segregated account consisting of cash,
U.S. government securities or other liquid, high-grade debt obligations having a value equal to the fluctuating market value of
the option securities. The Fund will continue to cover any put option it writes by maintaining a segregated account with its custodian
as described above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may not purchase or write options on securities or options on indices if, as a result, the Fund will have more than 5% of the
value of its total assets invested in, or at risk with respect to, either such class of options.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
successful use of options and futures depends on the ability of the Adviser to predict the direction of the market, and is subject
to various additional risks. The investment techniques and skills required to use options and futures successfully are different
from those required to select equity and equity-linked securities for investment. The correlation between movements in the price
of the option or future and the price of the securities being hedged is imperfect and the risk from imperfect correlation increases,
with respect to stock index futures and options, as the composition of the Fund&rsquo;s portfolio diverges from the composition
of the index underlying such index futures and options. In addition, the ability of the Fund to close out a futures or options
position depends on a liquid secondary market. There is no assurance that liquid secondary markets will exist for any particular
option or futures contract at any particular time. The securities the Fund is required to maintain in segregated accounts in connection
with its hedging transactions are not available for investment in accordance with the Fund&rsquo;s investment objective of long-term
capital appreciation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">On U.S.
exchanges, once an option contract has been accepted for clearance, the exchange clearing organization is substituted as both
buyer and seller of the contract, thereby guaranteeing the financial integrity of the option contract. Options on securities and
on indices traded on certain non-U.S. exchanges may not be so guaranteed by a clearing organization. The absence of such a role
for a clearing organization on such a non-U.S. exchange would expose the Fund to the credit risk of its counterparty. If its counterparty
were to default on its obligations, the Fund could lose the expected benefit of the transaction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Repurchase
Agreements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">When cash
may be available to the Fund for only a few days, the Fund may invest such cash in repurchase agreements until such time as it
otherwise may be invested or used for payments of obligations of the Fund. In these transactions, the Fund purchases a security
and simultaneously commits to resell that security to the seller at an agreed-upon price and date. The resale price reflects the
purchase price plus an agreed-upon market rate of interest, which is unrelated to the coupon rate or maturity of the security
purchased. The obligation of the seller to pay the agreed-upon price is secured by the value of the underlying securities, which
is maintained at the Fund&rsquo;s custodian at a value at least equal to the resale price. The Adviser monitors the adequacy of
the collateral on a daily basis to ensure that the collateral always equals or exceeds the repurchase price. Repurchase agreements
could involve certain risks in the event of default or insolvency of the other party, including possible delays or restrictions
upon the Fund&rsquo;s ability to dispose of the underlying securities. The Fund could suffer a loss to the extent proceeds from
the sale of collateral were less than the value of the contract.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may not invest its assets in repurchase agreements with a maturity of more than seven days, but the collateral securities may
have maturities of more than one year. The Fund has not adopted an investment restriction limiting the value of its total assets
not invested in accordance with its fundamental investment policy that may be invested in repurchase agreements. To minimize the
risks of such investments, however, the Fund enters into repurchase agreements only with its custodian, other member banks of
the Federal Reserve System having assets in excess of $1 billion, and recognized primary U.S. Government securities dealers determined
by the Adviser, subject to review by the board of the Fund, to be creditworthy.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Repurchase
agreements do not constitute cash, cash items, receivables or government securities for purposes of the federal tax diversification
test. Therefore, the Fund limits its investments in repurchase agreements with any one bank, dealer, broker or other entity in
order to comply with the federal tax diversification test.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Debt
Securities</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may invest up to 20% of its assets in non-equity linked debt securities including foreign denominated corporate debt and sovereign
debt issued by foreign governments, their agencies or instrumentalities, or other government-related entities. Debt securities,
such as bonds, involve credit risk. This is the risk that the issuer will not make timely payments of principal and interest.
The degree of credit risk depends on the issuer&rsquo;s financial condition and on the terms of the debt securities. Changes in
an issuer&rsquo;s credit rating or the market&rsquo;s perception of an issuer&rsquo;s creditworthiness may also affect the value
of a Fund&rsquo;s investment in that issuer. All debt securities are subject to interest rate risk. This is the risk that the
value of the security may fall when interest rates rise. If interest rates move sharply in a manner not anticipated by the Adviser,
a Fund&rsquo;s investments in debt securities could be adversely affected and the Fund could lose money. In general, the market
price of debt securities with longer maturities will go up or down more in response to changes in interest rates than will the
market price of shorter-term debt securities. In addition, debt securities issued in foreign currency denominations will be subject
to currency risk.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Investment
in sovereign debt can involve a high degree of risk. The governmental entity that controls the repayment of sovereign debt may
not be able or willing to repay the principal and/or interest when due in accordance with the terms of such debt. A governmental
entity&rsquo;s willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors,
its cash flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment
is due, the relative size of the debt service burden to the economy as a whole, the governmental entity&rsquo;s policy towards
the International Monetary Fund and the political constraints to which a governmental entity may be subject. Governmental entities
may also be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal
and interest arrearages on their debt. The commitment on the part of these governments, agencies and others to make such disbursements
may be conditioned on the implementation of economic reforms and/or economic performance and the timely service of such debtor&rsquo;s
obligations. Failure to implement such reforms, achieve such levels of economic performance or repay principal or interest when
due may result in the cancellation of such third parties&rsquo; commitments to lend funds to the governmental entity, which may
further impair such debtor&rsquo;s ability or willingness to timely service its debts. Consequently, governmental entities may
default on their sovereign debt. Holders of sovereign debt may be requested to participate in the rescheduling of such debt and
to extend further loans to governmental entities. In the event of a default by a governmental entity, there may be few or no effective
legal remedies for collecting on such debt.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Securities
Lending</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may lend portfolio securities with a value not exceeding 33 1/3% of its total assets or the limit prescribed by applicable law
to banks, brokers and other financial institutions. In return, the Fund receives collateral in cash or securities issued or guaranteed
by the U.S. Government, which will be maintained at all times in an amount equal to at least 100% of the current market value
of the loaned securities. The Fund maintains the ability to obtain the right to vote or consent on proxy proposals involving material
events affecting securities loaned. The Fund receives the income on the loaned securities. Where the Fund receives securities
as collateral, the Fund receives a fee for its loans from the borrower and does not receive the income on the collateral. Where
the Fund receives cash collateral, it may invest such collateral and retain the amount earned, net of any amount rebated to the
borrower. As a result, the Fund&rsquo;s yield may increase. Loans of securities are terminable at any time and the borrower, after
notice, is required to return borrowed securities within the standard time period for settlement of securities transactions. The
Fund is obligated to return the collateral to the borrower at the termination of the loan. The Fund could suffer a loss in the
event the Fund must return the cash collateral and there are losses on investments made with the cash collateral. In the event
the borrower defaults on any of its obligations with respect to a securities loan, the Fund could suffer a loss where there are
losses on investments made with the cash collateral or where the value of the securities collateral falls below the market value
of the borrowed securities. The Fund could also experience delays and costs in gaining access to the collateral. The Fund may
pay reasonable securities lending agent, administrative and custodial fees in connection with its loans.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Portfolio
Turnover</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">It is the
Fund&rsquo;s policy to sell any security whenever, in the opinion of the Adviser, the appreciation possibilities of the security
have been substantially realized or the business or market prospects for the issuer of such security have deteriorated, irrespective
of the length of time that such security has been held. In addition, the Fund from time to time may engage in short-term transactions
in order to take advantage of what the Adviser believes to be market inefficiencies in the pricing of equity and equity-linked
securities. The Adviser expects that the Fund&rsquo;s annual rate of portfolio turnover may exceed 100% at times when the Fund
is taking advantage of short-term trading opportunities or if a complete reallocation of the Fund&rsquo;s investment portfolio
becomes advisable. A 100% annual turnover rate would occur if all of the securities in the Fund&rsquo;s portfolio were replaced
once within a period of one year. The turnover rate has a direct effect on the transaction costs borne by the Fund.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Investment
Restrictions</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
has adopted certain investment restrictions that may not be changed without the prior approval of a majority of the board. For
purposes of the non-fundamental restrictions listed below and other investment restrictions of the Fund described in this prospectus,
all percentage limitations apply immediately after a purchase or initial investment, and any subsequent change in any applicable
percentage resulting from market fluctuations does not require elimination of any security from the Fund&rsquo;s portfolio. Under
its investment restrictions, the Fund may not:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">1.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Purchase
                                         any securities (other than obligations of the U.S. government, its agencies or instrumentalities
                                         or securities of other regulated investment companies) if as a result more than 25% of
                                         the Fund&rsquo;s total assets would be invested in securities of any single issuer.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">2.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Invest
                                         25% or more of the value of its total assets in a particular industry. This restriction
                                         does not apply to securities issued or guaranteed by the U.S. government, its agencies
                                         or instrumentalities, but will apply to foreign government obligations until such time
                                         as the SEC permits their exclusion.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">3.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Purchase
                                         more than 10% of the outstanding voting securities of any one issuer.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">4.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Issue
                                         senior securities, pledge its assets or borrow money in excess of 10% of the total value
                                         of its assets (including the amount borrowed) less its liabilities (not including its
                                         borrowings) and other than for temporary or emergency purposes or for the clearance of
                                         transactions, except that the Fund may borrow from a bank or other entity in a privately
                                         arranged transaction for repurchases and/or tenders for its shares, if after such borrowing
                                         there is asset coverage of at least 300% as defined in the 1940 Act, and may pledge its
                                         assets to secure any permitted borrowing. For the purposes of this investment restriction,
                                         the Fund will not purchase additional portfolio securities while borrowings exceed 5%
                                         of the Fund&rsquo;s total assets; and collateral arrangements with respect to the writing
                                         of options or the purchase or sale of futures contracts are not deemed a pledge of assets
                                         or the issuance of a senior security.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">5.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Make
                                         loans, except through purchasing debt obligations, lending portfolio securities and entering
                                         into repurchase agreements consistent with the Fund&rsquo;s investment objective and
                                         policies.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">6.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Purchase
                                         or sell real estate or real estate mortgage loans, except that the Fund may purchase
                                         and sell securities secured by real estate or interests therein.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">7.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Make
                                         short sales of securities or maintain a short position in any security.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">8.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Purchase
                                         securities on margin, except such short-term credits as may be necessary or routine for
                                         the clearance or settlement of transactions, and except that the Fund may engage in transactions
                                         as described under &ldquo;Investment Objective and Policies--Hedging Transactions&rdquo;
                                         and post margin in connection therewith consistent with its investment policies.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">9.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Underwrite
                                         securities of other issuers, except insofar as the Fund may be deemed an underwriter
                                         under the Securities Act in selling portfolio securities.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">10.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Buy
                                         or sell commodities, commodity contracts or futures contracts (other than as described
                                         under &ldquo;Investment Objective and Policies&mdash;Hedging Transactions&rdquo;).</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">11.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Buy,
                                         sell or write put or call options (other than as described under &ldquo;Special Leverage
                                         Considerations - Hedging Transactions&rdquo;).</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
is also subject to certain diversification requirements with respect to its qualification as a &ldquo;regulated investment company&rdquo;
under the Code. See &ldquo;Taxation-- Federal Taxation of the Fund and its Distributions&rdquo;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">As an additional
non-fundamental investment restriction, the Fund will not guarantee the obligations of third parties. The Fund may invest in other
investment companies, subject to limitations set forth in the 1940 Act.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>RISK FACTORS
AND SPECIAL CONSIDERATIONS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Investing
in the Fund&rsquo;s common stock provides an ownership interest in the Fund. Investing in any investment company security involves
significant risk, including the risk that a stockholder may receive little or no return on the stockholder&rsquo;s investment
or that the stockholder may lose part or all of the stockholder&rsquo;s investment. In addition to the other information contained
in this prospectus and the applicable prospectus supplement, you should consider carefully the following information before making
an investment in our securities. The risks below are not the only risks we face. Additional risks and uncertainties not presently
known to us or not presently deemed material by us may also impair our operations and performance. If any of the following events
occur, our business, financial condition and results of operations could be materially and adversely affected. In such case, the
net asset value and trading price, if any, of our common stock could decline, or the value of our subscription rights may decline,
and you may lose all or part of your investment. Therefore, before investing, stockholders should consider carefully the following
risks that are assumed when investing in the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><B>Risks Related to Offerings
Pursuant to this Prospectus</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">A stockholder&rsquo;s
interest in us will be diluted if we issue additional shares of common stock, which could reduce the overall value of an investment
in us. Our stockholders do not have preemptive rights to any shares we issue in the future. Our Articles of Incorporation authorizes
us to issue up to 100,000,000 shares of capital stock, all of which is currently designated as common stock. Our board may elect
to sell additional shares in the future or issue equity interests in private offerings. To the extent we issue additional equity
interests at or below net asset value, stockholders&rsquo; the percentage ownership interest in us may be diluted. In addition,
depending upon the terms and pricing of any additional offerings and the value of our investments, holders of our common stock
may also experience dilution in the book value and fair value of their shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Under the
1940 Act, we generally are prohibited from issuing or selling our common stock at a price below net asset value per share, which
may be a disadvantage as compared with certain public companies. We may, however, sell our common stock, or warrants, options,
or rights to acquire our common stock, at a price below the current net asset value of our common stock if our board of directors
and independent directors determine that such sale is in our best interests and the best interests of our stockholders, and our
stockholders, including a majority of those stockholders that are not affiliated with us, approve such sale. In any such case,
the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our board
of directors, closely approximates the fair value of such securities (less any distributing commission or discount). If we raise
additional funds by issuing common stock or senior securities convertible into, or exchangeable for, our common stock, then the
percentage ownership of our stockholders at that time will decrease and holders of our common stock will experience dilution.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Certain
provisions of the Maryland General Corporation Law could deter takeover attempts. The Maryland Control Share Acquisition Act significantly
restricts the voting rights of control shares of a Maryland corporation acquired in a control share acquisition. The Maryland
Control Share Acquisition Act may make it more difficult for a third party to obtain control of us and increase the difficulty
of consummating such a transaction. <FONT STYLE="font-family: Times New Roman, Times, Serif">The Fund has not opted-in to the
provisions of the Maryland Control Share Acquisition Act.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Discount
From Net Asset Value</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Shares of
closed-end funds frequently trade at a market price that is less than the value of the net assets attributable to those shares.
The possibility that the Fund&rsquo;s shares will trade at a discount from NAV is a risk separate and distinct from the risk that
the Fund&rsquo;s NAV will decrease. The risk of purchasing shares of a closed-end fund that might trade at a discount or unsustainable
premium is more pronounced for investors who wish to sell their shares in a relatively short period of time after purchasing them
because, for those investors, realization of a gain or loss on their investments is likely to be more dependent upon the existence
of a premium or discount than upon portfolio performance. The Fund&rsquo;s shares are not redeemable at the request of stockholders.
The Fund may repurchase its shares in the open market or in private transactions, although it has no present intention to do so.
Stockholders desiring liquidity may, subject to applicable securities laws, trade their shares in the Fund on the NASDAQ Capital
Market or other markets on which such shares may trade at the then current market value, which may differ from the then current
NAV.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The NAV
of our common stock may fluctuate significantly. The NAV and liquidity of the market for shares of our common stock may be significantly
affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance.
These factors include:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&#9679;</FONT></TD><TD><FONT STYLE="font-size: 11pt">changes
                                         in the value of our portfolio of investments;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&#9679;</FONT></TD><TD><FONT STYLE="font-size: 11pt">changes
                                         in regulatory policies or tax guidelines;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&#9679;</FONT></TD><TD><FONT STYLE="font-size: 11pt">distributions
                                         that exceed our net investment income and net income as reported according to generally
                                         accepted account principles in the United States;</FONT></TD></TR></TABLE>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&#9679;</FONT></TD><TD><FONT STYLE="font-size: 11pt">changes
                                         in earnings or variations in operating results;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&#9679;</FONT></TD><TD><FONT STYLE="font-size: 11pt">changes
                                         in accounting guidelines governing valuation of our investments;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&#9679;</FONT></TD><TD><FONT STYLE="font-size: 11pt">departure
                                         of our Adviser or certain of their respective key personnel; and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">general
                                         economic trends and other external factors.</FONT></TD>
</TR></TABLE>

<P STYLE="margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Investing
in our securities involves a high degree of risk. The investments we make in accordance with our investment objective may result
in a higher amount of risk than alternative investment options and includes volatility or loss of principal. Our investments in
portfolio companies may be highly speculative and aggressive and, therefore, an investment in our securities may not be suitable
for someone with lower risk tolerance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><B>Risks of Investing in Caribbean
Basin Countries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The economies
of Caribbean Basin Countries have in the past experienced considerable difficulties, including high inflation rates, high interest
rates, and high unemployment. The emergence of the economies and securities markets of the Caribbean Basin Countries will require
continued economic and fiscal discipline that has been lacking at times in the past, as well as stable political and social conditions.
International economic conditions, particularly those in the United States, as well as world prices for oil and other commodities
may also influence the development of the economies of the Caribbean Basin Countries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The currencies
of foreign countries (including those foreign countries in the definition of the Caribbean Basin) are subject to fluctuations
relative to the U.S. Dollar and foreign countries (including those foreign countries in the definition of the Caribbean Basin)
have had to make major adjustments in their currencies from time to time. Also many Caribbean Basin Countries have experienced
substantial, and in some periods extremely high, rates of inflation for many years. For companies that keep accounting records
in the local currency, inflation accounting rules in some Caribbean Basin Countries require, for both tax and accounting purposes,
that certain assets and liabilities be restated on the company&rsquo;s balance sheet in order to express items in terms of currency
of constant purchasing power. Inflation accounting may indirectly generate losses or profits for certain Caribbean Basin Companies.
Inflation and rapid fluctuations in inflation rates have had, and could, in the future, have very negative effects on the economies
and securities markets of certain Caribbean Basin Countries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In addition,
governments of many Caribbean Basin Countries have exercised and continue to exercise substantial influence over many aspects
of the private sector. Governmental actions in the future could have a significant effect on economic conditions in Caribbean
Basin Countries, which could affect the companies in which the Fund invests and, therefore, the value of Fund shares. Investments
in foreign markets may be adversely affected by governmental actions such as the imposition of punitive taxes. In addition, the
governments of certain countries may prohibit or impose substantial restrictions on foreign investing in their capital markets
or in certain industries. Substantial limitations may exist in certain countries with respect to the Fund&rsquo;s ability to repatriate
investment income, capital or the proceeds of sales of securities. The Fund could be adversely affected by delays in, or a refusal
to grant, any required governmental approval for repatriation of capital, as well as by the application to the Fund of any restrictions
on investments. Any of these actions could severely affect security prices, impair the Fund&rsquo;s ability to purchase or sell
foreign securities or transfer the Fund&rsquo;s assets or income back into the United States, or otherwise adversely affect the
Fund&rsquo;s operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Certain
Caribbean Basin Countries have entered into regional trade agreements that are designed to, among other things, reduce barriers
between countries, increase competition among companies and reduce government subsidies in certain industries. No assurance can
be given that these changes will be successful in the long term, or that these changes will result in the economic stability intended.
There is a possibility that these trade arrangements will not be fully implemented, or will be partially or completely unwound.
It is also possible that a significant participant could choose to abandon a trade agreement, which could diminish its credibility
and influence. Any of these occurrences could have adverse effects on the markets of both participating and non-participating
countries, including sharp appreciation or depreciation of participants&rsquo; national currencies and a significant increase
in exchange rate volatility, a resurgence in economic protectionism, an undermining of confidence in the Caribbean Basin markets,
an undermining of Caribbean Basin economic stability, the collapse or slowdown of the drive towards economic unity, and/or reversion
of the attempts to lower government debt and inflation rates that were introduced in anticipation of such trade agreements. Such
developments could have an adverse impact on the Fund&rsquo;s investments in the Caribbean Basin generally or in specific countries
participating in such trade agreements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Caribbean
Basin has experienced natural disasters, including hurricanes, droughts and floods, which have caused substantial damage to parts
of the Caribbean Basin and have harmed the region&rsquo;s economies. The possibility exists that another natural disaster could
materially disrupt and adversely affect the economies of Caribbean Basin Countries. In addition, companies and industries in which
the Fund invests may experience substantial disruptions in operations as a result of any such natural disasters.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Caribbean
Basin is vulnerable to environmental disasters, for instance the BP Oil spill in the Gulf of Mexico in 2010 had a widespread economic
impact on the region. The potential and impact of such occurrences in the future is impossible to gauge.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Other Caribbean
Basin market risks include foreign exchange controls, difficulties in pricing securities, defaults on sovereign debt, difficulties
in enforcing contracts, difficulties in enforcing favorable legal judgments in local courts and political and social instability.
Legal remedies available to investors in certain Caribbean Basin countries may be less extensive than those available to investors
in the United States or other foreign countries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Geographic
Concentration Risk</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may invest from time to time a substantial amount of its assets in issuers located in a single country or a limited number of
countries. If the Fund concentrates its investments in this manner, it assumes the risk that economic, political and social conditions
in those countries will have a significant impact on its investment performance. The Fund&rsquo;s investment performance may also
be more volatile if it concentrates its investments in certain countries, especially emerging market countries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Foreign
Securities Risk</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Securities
traded in foreign markets have often (though not always) performed differently from securities traded in the United States. However,
such investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will
lose money. In particular, the Fund is subject to the risk that because there may be fewer investors on foreign exchanges and
a smaller number of securities traded each day, it may be more difficult for the Fund to buy and sell securities on those exchanges.
In addition, prices of foreign securities may go up and down more than prices of securities traded in the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Foreign
Economy Risk</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The economies
of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth
of gross national product, reinvestment of capital, resources and balance of payments position. Certain foreign economies may
rely heavily on particular industries or foreign capital and are more vulnerable to diplomatic developments, the imposition of
economic sanctions against a particular country or countries, changes in international trading patterns, trade barriers and other
protectionist or retaliatory measures. Investments in foreign markets may also be adversely affected by governmental actions such
as the imposition of capital controls, nationalization of companies or industries, expropriation of assets or the imposition of
punitive taxes. In addition, the governments of certain countries may prohibit or impose substantial restrictions on foreign investments
in their capital markets or in certain industries. Any of these actions could severely affect securities prices or impair the
Fund&rsquo;s ability to purchase or sell foreign securities or transfer the Fund&rsquo;s assets or income back into the United
States, or otherwise adversely affect the Fund&rsquo;s operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Other potential
foreign market risks include foreign exchange controls, difficulties in pricing securities, defaults on foreign government securities,
difficulties in enforcing legal judgments in foreign courts and political and social instability. Legal remedies available to
investors in certain foreign countries may be less extensive than those available to investors in the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Currency
Risk</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Securities
and other instruments in which the Fund invests may be denominated or quoted in currencies other than the U.S. Dollar. Changes
in foreign currency exchange rates may affect the value of the Fund&rsquo;s portfolio. Because the Fund&rsquo;s assets are primarily
invested in securities of Caribbean Basin Companies, and because some portion of revenues and income may be received in foreign
currencies while Fund distributions will be made in dollars, the dollar equivalent of the Fund&rsquo;s net assets and distributions
would be adversely affected by reductions in the value of the foreign currencies relative to the dollar. For this reason, changes
in foreign currency exchange rates can affect the value of the Fund&rsquo;s portfolio. Generally, when the U.S. Dollar rises in
value against a foreign currency, a security denominated in that currency loses value because the currency is worth fewer U.S.
Dollars. Conversely, when the U.S. Dollar decreases in value against a foreign currency, a security denominated in that currency
gains value because the currency is worth more U.S. Dollars. This risk, generally known as &ldquo;currency risk,&rdquo; means
that a strong U.S. Dollar may reduce returns for U.S. investors while a weak U.S. Dollar may increase those returns. The Fund
is managed with the assumption that most of its stockholders hold their assets in U.S. Dollars. As a result, and because distributions
are made in U.S. Dollars, other non-U.S. investors will be adversely affected by reductions in the value of the U.S. Dollar relative
to their home currency.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Governmental
Supervision and Regulation/Accounting Standards</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Foreign
issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice
comparable to those applicable to U.S. issuers. Some of the securities held by the Fund may not be registered with the SEC nor
may the issuers be subject to the SEC&rsquo;s reporting requirements. Thus, there may be less available information concerning
foreign issuers of securities held by the Fund than is available concerning U.S. issuers. Adequate public information on foreign
issuers may not be available, and it may be difficult to secure dividends and information regarding corporate actions on a timely
basis. In general, there is less overall governmental supervision and regulation of securities exchanges, brokers, and listed
companies than in the United States. OTC markets tend to be less regulated than stock exchange markets and, in certain countries,
may be totally unregulated. Regulatory enforcement may be influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In addition,
the U.S. Government has from time to time imposed restrictions, through penalties and otherwise, on foreign investments by U.S.
investors, including current prohibitions on U.S. investment in Cuba. Investments in securities of Cuban companies, if permitted
by U.S. law, may be subject to certain political and economic risks in addition to the risks associated with investment in the
securities of issuers domiciled in other foreign countries. The risks include (i) less social, political and economic stability;
(ii) the small current size of the markets for such securities and the currently low or nonexistent volume of trading, which result
in a lack of liquidity and in greater price volatility; (iii) certain national policies which may restrict the Fund&rsquo;s investment
opportunities, including restrictions on investment in issuers or industries deemed sensitive to national interests; (iv) the
absence of developed legal structures governing private or foreign investment or allowing for judicial redress for injury to private
property; (v) the absence of a capital market structure or market-oriented economy; and (vi) the possibility that recent favorable
economic developments may be slowed or reversed by unanticipated political or social events in such countries. Investments in
securities of Cuban companies, if and when the Fund is permitted to invest in such securities, will be speculative and involve
risks not usually associated with investments in securities of issuers in more developed market economies. See &ldquo;Emerging
Markets Risk&rdquo; below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Some foreign
securities or nations impose restrictions on transfer within the United States or to U.S. persons. Although securities subject
to such transfer restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that
are not subject to such restrictions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Accounting
standards in other countries are not necessarily the same as in the United States. If the accounting standards in another country
do not require as much detail as U.S. accounting standards, it may be harder for the Adviser to completely and accurately determine
a company&rsquo;s financial condition. In instances where the financial statements of an issuer are not deemed to reflect accurately
the financial situation of the issuer, the Adviser will take appropriate steps to evaluate the proposed investment, which may
include on-site inspection of the issuer (including Cuba, if U.S. restrictions on travel to Cuba are lifted), interviews with
its management and consultation with accountants, bankers and other specialists.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Certain
Risks of Holding Fund Assets Outside the United States</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
generally holds its foreign securities and cash in foreign banks and securities depositories. Some foreign banks and securities
depositories may be recently organized or new to the foreign custody business. In addition, there may be limited or no regulatory
oversight of their operations. Also, the laws of certain countries limit the Fund&rsquo;s ability to recover its assets if a foreign
bank, depository or issuer of a security, or any of their agents, goes bankrupt. In addition, it is often more expensive for the
Fund to buy, sell and hold securities in certain foreign markets than in the United States. The increased expense of investing
in foreign markets reduces the amount the Fund can earn on its investments and typically results in a higher operating expense
ratio for the Fund than for investment companies invested only in the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Settlement
Risk</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Settlement
and clearance procedures in certain foreign markets differ significantly from those in the United States. Foreign settlement and
clearance procedures and trade regulations also may involve certain risks (such as delays in payment for or delivery of securities)
not typically associated with the settlement of U.S. investments. Communications between the United States and emerging market
countries may be unreliable, increasing the risk of delayed settlements or losses of security certificates in markets that still
rely on physical settlement. At times, settlements in certain foreign countries have not kept pace with the number of securities
transactions. These problems may make it difficult for the Fund to carry out transactions. If the Fund cannot settle or is delayed
in settling a purchase of securities, it may miss attractive investment opportunities and certain of its assets may be uninvested
with no return earned thereon for some period. If the Fund cannot settle or is delayed in settling a sale of securities, it may
lose money if the value of the security then declines or, if it has contracted to sell the security to another party, the Fund
could be liable for any losses incurred. Dividends or interest on, or proceeds from the sale of, foreign securities may be subject
to foreign withholding taxes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Emerging
Markets Risk</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The risks
of foreign investments are usually much greater for emerging markets. Investments in emerging markets, including many Caribbean
Basin Countries, may be considered speculative. Emerging markets are riskier than more developed markets because they tend to
develop unevenly and may never fully develop. Since these markets are often small, they may be more likely to suffer sharp and
frequent price changes or long-term price depression because of adverse publicity, investor perceptions or the actions of a few
large investors. Many emerging markets have histories of political instability and abrupt changes in policies. As a result, their
governments are more likely to take actions that are hostile or detrimental to private enterprise or foreign investment than those
of more developed countries. Certain emerging markets may also face other significant internal or external risks, including the
risk of war, and civil unrest. In addition, governments in many emerging market countries participate to a significant degree
in their economies and securities markets, which may impair investment and economic growth.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Investments
in the securities of issuers domiciled in countries with emerging capital markets involve certain additional risks that do not
generally apply to investments in securities of issuers in more developed capital markets, such as (i) low or non-existent trading
volume, resulting in a lack of liquidity and increased volatility in prices for such securities, as compared to securities of
comparable issuers in more developed capital markets; (ii) uncertain national policies and social, political and economic instability,
increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic
developments; (iii) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition
of exchange controls, custodial restrictions or other foreign or U.S. governmental laws or restrictions applicable to such investments;
(iv) national policies that may limit the Fund&rsquo;s investment opportunities such as restrictions on investment in issuers
or industries deemed sensitive to national interests; and (v) the lack or relatively early development of legal structures governing
private and foreign investments and private property. In addition to withholding taxes on investment income, some countries with
emerging markets may impose differential capital gains taxes on foreign investors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Emerging
capital markets are developing in a dynamic political and economic environment brought about by events over recent years that
have reshaped political boundaries and traditional ideologies. In such a dynamic environment, there can be no assurance that any
or all of these capital markets will continue to present viable investment opportunities for the Fund. In the past, governments
of such nations have expropriated substantial amounts of private property, and most claims of the property owners have never been
fully settled. There is no assurance that such expropriations will not reoccur. In such an event, it is possible that the Fund
could lose the entire value of its investments in the affected market.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Also, there
may be less publicly available information about issuers in emerging markets than would be available about issuers in more developed
capital markets, and such issuers may not be subject to accounting, auditing and financial reporting standards and requirements
comparable to those to which U.S. companies are subject. In certain countries with emerging capital markets, reporting standards
vary widely. As a result, traditional investment measurements used in the United States, such as price/ earnings ratios, may not
be applicable. Emerging market securities may be substantially less liquid and more volatile than those of mature markets, and
company shares may be held by a limited number of persons. This may adversely affect the timing and pricing of the Fund&rsquo;s
acquisition or disposal of securities. Communications between the United States and emerging market countries may be unreliable,
increasing the risk of delayed settlements or losses of security certificates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Practices
in relation to settlement of securities transactions in emerging markets involve higher risks than those in developed markets,
in part because the Fund may need to use brokers and counterparties that are less well capitalized, and custody and registration
of assets in some countries may be unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer
or refusal to recognize ownership exists in some emerging markets, and, along with other factors, could result in ownership registration
being completely lost. The Fund would absorb any loss resulting from such registration problems and may have no successful claim
for compensation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-size: 11pt"><B>Risks Related
to Equity and Equity-Linked Securities</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Common Stock Risks</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may invest in common stock. Common stock is issued by a company principally to raise cash for business purposes and represents
an equity or ownership interest in the issuing company. Common stockholders are typically entitled to vote on important matters
of the issuing company, including the selection of directors, and may receive dividends on their holdings. The Fund participates
in the success or failure of any company in which it holds common stock. In the event a company is liquidated or declares bankruptcy,
the claims of bondholders, other debt holders, owners of preferred stock and general creditors take precedence over the claims
of those who own common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The prices
of common stocks change in response to many factors including the historical and prospective earnings of the issuing company,
the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Preferred Stock Risks</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may invest in preferred stock. Preferred stock, unlike common stock, often offers a specified dividend rate payable from a company&rsquo;s
earnings. Preferred stock also generally has a preference over common stock on the distribution of a company&rsquo;s assets in
the event the company is liquidated or declares bankruptcy; however, the rights of preferred stockholders on the distribution
of a company&rsquo;s assets in the event of a liquidation or bankruptcy are generally subordinate to the rights of the company&rsquo;s
debt holders and general creditors. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing
the price of preferred stocks to decline.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Some fixed
rate preferred stock may have mandatory sinking fund provisions that provide for the stock to be retired or redeemed on a predetermined
schedule, as well as call/redemption provisions prior to maturity, which can limit the benefit of any decline in interest rates
that might positively affect the price of preferred stocks. Preferred stock dividends may be &ldquo;cumulative,&rdquo; requiring
all or a portion of prior unpaid dividends to be paid before dividends are paid on the issuer&rsquo;s common stock. Preferred
stock may be &ldquo;participating,&rdquo; which means that it may be entitled to a dividend exceeding the stated dividend in certain
cases.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Convertible Securities Risks</U>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may invest in convertible securities. Convertible securities are generally bonds, debentures, notes, preferred stocks or other
securities or investments that may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common
stock (or cash or securities of equivalent value) at a stated exchange ratio or predetermined price (the conversion price). A
convertible security is designed to provide current income and also the potential for capital appreciation through the conversion
feature, which enables the holder to benefit from increases in the market price of the underlying common stock. A convertible
security may be called for redemption or conversion by the issuer after a particular date and under certain circumstances (including
a specified price) established upon issue. If a convertible security held by the Fund is called for redemption or conversion,
the Fund could be required to tender it for redemption, convert it into the underlying common stock, or sell it to a third party,
which may have an adverse effect on the Fund&rsquo;s ability to achieve its investment objective. Convertible securities have
general characteristics similar to both debt and equity securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">A convertible
security generally entitles the holder to receive interest paid or accrued until the convertible security matures or is redeemed,
converted or exchanged. Before conversion, convertible securities have characteristics similar to non-convertible debt obligations
and are designed to provide for a stable stream of income with generally higher yields than common stocks. However, there can
be no assurance of current income because the issuers of the convertible securities may default on their obligations. Convertible
securities rank senior to common stock in a corporation&rsquo;s capital structure and, therefore, generally entail less risk than
the corporation&rsquo;s common stock. Convertible securities are subordinate in rank to any senior debt obligations of the issuer,
and, therefore, an issuer&rsquo;s convertible securities entail more risk than its debt obligations. Moreover, convertible securities
are often rated below investment grade or not rated because they fall below debt obligations and just above common stock in order
of preference or priority on an issuer&rsquo;s balance sheet. To the extent that the Fund invests in convertible securities with
credit ratings below investment grade, such securities may have a higher likelihood of default, although this may be somewhat
offset by the convertibility feature.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Convertible
securities generally offer lower interest or dividend yields than non-convertible debt securities of similar credit quality because
of the potential for capital appreciation. The common stock underlying convertible securities may be issued by a different entity
than the issuer of the convertible securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The value
of convertible securities is influenced by both the yield of non-convertible securities of comparable issuers and by the value
of the underlying common stock. The value of a convertible security viewed without regard to its conversion feature (i.e., strictly
on the basis of its yield) is sometimes referred to as its &ldquo;investment value.&rdquo; The investment value of the convertible
security typically will fluctuate based on the credit quality of the issuer and will fluctuate inversely with changes in prevailing
interest rates. However, at the same time, the convertible security will be influenced by its &ldquo;conversion value,&rdquo;
which is the market value of the underlying common stock that would be obtained if the convertible security were converted. Conversion
value fluctuates directly with the price of the underlying common stock, and will therefore be subject to risks relating to the
activities of the issuer and general market and economic conditions. Depending upon the relationship of the conversion price to
the market value of the underlying security, a convertible security may trade more like an equity security than a debt instrument.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
will invest in convertible securities based primarily on the characteristics of the equity security into which it converts, and
without regard to the credit rating of the convertible security (even if the credit rating is below investment grade). To the
extent that the Fund invests in convertible securities with credit ratings below investment grade, such securities may have a
higher likelihood of default, although this may be somewhat offset by the convertibility feature.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">If, because
of a low price of the common stock, the conversion value is substantially below the investment value of the convertible security,
the price of the convertible security is governed principally by its investment value. Generally, if the conversion value of a
convertible security increases to a point that approximates or exceeds its investment value, the value of the security will be
principally influenced by its conversion value. A convertible security will sell at a premium over its conversion value to the
extent investors place value on the right to acquire the underlying common stock while holding an income-producing security.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Risks of Other Equity-Linked
Securities</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Equity-linked
securities are instruments whose value is based upon the value of one or more underlying equity securities, a reference rate or
an index. Equity-linked securities come in many forms and may include features, among others, such as the following: (i) may be
issued by the issuer of the underlying equity security or by a company other than the one to which the instrument is linked (usually
an investment bank), (ii) may convert into equity securities, such as common stock, within a stated period from the issue date
or may be redeemed for cash or some combination of cash and the linked security at a value based upon the value of the underlying
equity security within a stated period from the issue date, (iii) may have various conversion features prior to maturity at the
option of the holder or the issuer or both, (iv) may limit the appreciation value with caps or collars of the value of the underlying
equity security, and (v) may have fixed, variable or no interest payments during the life of the security which reflect the actual
or a structured return relative to the underlying dividends of the linked equity security.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Investments
in equity-linked securities may subject the Fund to additional risks not ordinarily associated with investments in other equity
securities. Because equity-linked securities are sometimes issued by a third party other than the issuer of the linked security,
the Fund is subject to risks if the underlying equity security, reference rate or index underperforms, or if the issuer defaults
on the payment of the dividend or the common stock at maturity. In addition, the trading market for particular equity-linked securities
may be less liquid, making it difficult for the Fund to dispose of a particular security when necessary and reduced liquidity
in the secondary market for any such securities may make it more difficult to obtain market quotations for valuing the Fund&rsquo;s
portfolio.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-size: 11pt"><B>Risks Relating
to Our Adviser and its Affiliates</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Conflicts of Interest Caused
by Compensation Arrangements </U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Adviser
and its respective affiliates will receive substantial fees from us in return for their services. These fees could influence the
advice provided to us. Generally, the more equity we sell in public offerings and the greater the risk assumed by us with respect
to our investments, the greater the potential for growth in our assets and profits (and, correlatively, the fees payable by us
to the Adviser). These compensation arrangements could affect our Adviser&rsquo;s or its affiliates&rsquo; judgment with respect
to public offerings of equity and investments made by us, which allow the Adviser to earn increased asset management fees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Competition for the Time and
Resources of the Adviser </U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Adviser
currently manages other investment entities and is not prohibited from raising money for and managing future investment entities
that make the same types of investments as those we target. As a result, the time and resources that our Adviser devotes to us
may be diverted, and during times of intense activity in other programs the Adviser may devote less time and resources to our
business than is necessary or appropriate. In addition, we may compete with any such investment entity for the same investors
and investment opportunities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Conflicts of Interest in Connection
with the Management of our Business Affairs</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Our Adviser
will experience conflicts of interest in connection with the management of our business affairs, including relating to the allocation
of investment opportunities by the Adviser and its affiliates; compensation to the Adviser; services that may be provided by the
Adviser and its affiliates to issuers in which we invest; investments by us and other clients of the Adviser, subject to the limitations
of the 1940 Act; the formation of additional investment funds by the Adviser; differing recommendations given by the Adviser to
us versus other clients; the Adviser&rsquo;s use of information gained from issuers in our portfolio for investments by other
clients, subject to applicable law; and restrictions on the Adviser&rsquo;s use of &ldquo;inside information&rdquo; with respect
to potential investments by us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Conflicts of Interest with
the Adviser&rsquo;s Management of Other Accounts</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Because
our Adviser manages assets for other investment companies, pooled investment vehicles and/or other accounts (including institutional
clients, pension plans and certain high net worth individuals), certain conflicts of interest are present. For instance, an Adviser
may receive fees from certain accounts that are higher than the fees received by the Adviser from us, or receive a performance-based
fee on certain accounts. In those instances, a portfolio manager for the Adviser has an incentive to favor the higher fee and/or
performance-based fee accounts over us. In addition, a conflict of interest exists to the extent an Adviser has proprietary investments
in certain accounts, where its portfolio managers or other employees have personal investments in certain accounts, or when certain
accounts are investment options in the Adviser&rsquo;s employee benefit plans. The Adviser has an incentive to favor these accounts
over us. The Adviser has policies and procedures in place to mitigate such conflicts and our board of directors monitors these
conflicts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Risk due to the Adviser&rsquo;s
Actions on Behalf of its Other Accounts and Clients</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Our Adviser
manages assets for accounts other than us, including private funds (for purposes of this section, Adviser Funds). Actions taken
by an Adviser on behalf of its Adviser Funds may be adverse to us and our investments, which could harm our performance. For example,
we may invest in the same credit obligations as other Adviser Funds, although, to the extent permitted under the 1940 Act, our
investments may include different obligations of the same issuer. Decisions made with respect to the securities held by one Adviser
Fund may cause (or have the potential to cause) harm to the different class of securities of the issuer held by other Adviser
Funds (including us). As a further example, an Adviser may manage accounts that engage in short sales of (or otherwise take short
positions in) securities or other instruments of the type in which we invest, which could harm our performance for the benefit
of the accounts taking short positions, if such short positions cause the market value of the securities to fall.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Risk due to Inside Information</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In the course
of it duties, the members, officers, directors, employees, principals or affiliates of our Adviser may come into possession of
material, non-public information. The possession of such information may, to our detriment, limit the ability of our Adviser to
buy or sell a security or otherwise to participate in an investment opportunity for us. In certain circumstances, employees of
our Adviser may serve as board members or in other capacities for portfolio or potential portfolio companies, which could restrict
our ability to trade in the securities of such companies. For example, if personnel of our Adviser comes into possession of material
non-public information with respect to our investments, such personnel will be restricted by our Adviser&rsquo;s information-sharing
policies and procedures or by law or contract from sharing such information with our management team, even where the disclosure
of such information would be in our best interests or would otherwise influence decisions taken by the members of the management
team with respect to that investment. This conflict and these procedures and practices may limit the freedom of our Adviser to
enter into or exit from potentially profitable investments for us which could have an adverse effect on our results of operations.
Accordingly, there can be no assurance that we will be able to fully leverage the resources and industry expertise of our Adviser&rsquo;s
other businesses. Additionally, there may be circumstances in which one or more individuals associated with our Adviser will be
precluded from providing services to us because of certain confidential information available to those individuals or to other
parts of the Adviser.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Risk in Transactions with
Affiliates </U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We are prohibited
under the 1940 Act from participating in certain transactions with certain of our affiliates without the prior approval of a majority
of the independent directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding
voting securities will be our affiliate for purposes of the 1940 Act, and we will generally be prohibited from buying or selling
any securities from or to such affiliate on a principal basis. The 1940 Act also prohibits certain &ldquo;joint&rdquo; transactions
with certain of our affiliates, which in certain circumstances could include investments in the same portfolio company (whether
at the same or different times to the extent the transaction is considered a joint transaction. If a person acquires more than
25% of our voting securities, we will be prohibited from buying or selling any security from or to such person or certain of that
person&rsquo;s affiliates, or entering into prohibited joint transactions with such persons, absent the prior approval of the
SEC. Similar restrictions limit our ability to transact business with our officers or directors or their affiliates. As a result
of these restrictions, we may be prohibited from buying or selling any security from or to any portfolio company that is controlled
by a fund managed by either the Adviser or its affiliates without the prior approval of the SEC, which may limit the scope of
investment opportunities that would otherwise be available to us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We may,
however, invest alongside our Adviser&rsquo;s and its affiliates&rsquo; other clients, including other entities it manages, which
we refer to as affiliates&rsquo; other clients, in certain circumstances when doing so is consistent with applicable law and SEC
staff interpretations and guidance. We may also invest alongside the other clients of our Adviser, as otherwise permissible under
regulatory guidance, applicable regulations and the Adviser&rsquo;s allocation policies. However, we can offer no assurance that
investment opportunities will be allocated to us fairly or equitably in the short-term or over time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In situations
when co-investment with affiliates&rsquo; other clients is not permitted under the 1940 Act and related rules, existing or future
staff guidance, or the terms and conditions of exemptive relief granted to us by the SEC, our Adviser will need to decide which
client or clients will proceed with the investment. Generally, we will not have an entitlement to make a co-investment in these
circumstances and, to the extent that another client elects to proceed with the investment, we will not be permitted to participate.
Moreover, except in certain circumstances, we are unable to invest in any issuer in which an affiliate&rsquo;s other client holds
a controlling interest.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Risk of Investments that Could
Give Rise to a Conflict of Interest</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We do not
expect to invest in, or hold securities of, companies that are controlled by affiliates&rsquo; other clients. However, an affiliate&rsquo;s
other clients may invest in, and gain control over, one of our portfolio companies. If an affiliate&rsquo;s other client, or clients,
gains control over one of our portfolio companies, it may create conflicts of interest and may subject us to certain restrictions
under the 1940 Act. As a result of these conflicts and restrictions our Adviser may be unable to implement our investment strategies
as effectively as they could have in the absence of such conflicts or restrictions. For example, as a result of a conflict or
restriction, our Adviser may be unable to engage in certain transactions that it would otherwise pursue. In order to avoid these
conflicts and restrictions, our Adviser may choose to exit these investments prematurely and, as a result, we would forego any
positive returns associated with such investments. In addition, to the extent that an affiliate&rsquo;s other client holds a different
class of securities than we as a result of such transactions, our interests may not be aligned.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt"><B>CAUTIONARY
NOTICE REGARDING FORWARD-LOOKING STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">This prospectus
and any prospectus supplement contains forward-looking statements. Words such as &quot;anticipates,&quot; &quot;expects,&quot;
&quot;intends,&quot; &quot;plans,&quot; &quot;predicts,&quot; &quot;will,&quot; &quot;may,&quot; &quot;continue,&quot; &quot;believes,&quot;
&quot;seeks,&quot; &quot;estimates,&quot; &quot;would,&quot; &quot;could,&quot; &quot;should,&quot; &quot;targets,&quot; &quot;projects,&quot;
&quot;continue,&quot; &quot;forecast,&quot; &quot;possible,&quot; &quot;potential,&quot; &quot;approximate&quot; and variations
of these words and similar expressions, or the negatives of such words, are intended to identify forward-looking statements, although
not all forward-looking statements contain these identifying words. By their nature, all forward-looking statements involve risks
and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Several
factors that could materially affect our actual results are the performance of the portfolio of securities we hold, the price
at which our shares will trade in the public markets and other factors discussed in our periodic filings with the SEC. The forward-looking
statements contained in this prospectus and any prospectus supplement involve risks and uncertainties, including but not limited
to, statements as to potential changes to the current prohibition on investment with Cuba that may arise from future diplomatic
and legal developments with respect to the relationship between the United States and Cuba.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Although
we believe that the assumptions on which these forward-looking statements are based are reasonable, actual results could differ
materially from those projected or assumed in such forward-looking statements. The Fund&rsquo;s future financial condition and
results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and
uncertainties, such as those disclosed in the &ldquo;Investment Objective and Policies&rdquo; and &ldquo;Risk Factors and Special
Considerations&rdquo; sections of this prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">All forward-looking
statements contained in or incorporated by reference into this prospectus or any accompanying prospectus supplement are made as
of the date of this prospectus or the accompanying prospectus supplement, as the case may be. Except for the Fund&rsquo;s ongoing
obligations under the federal securities laws, it does not intend, and it undertakes no obligation, to update any forward-looking
statements. The forward-looking statements contained in this prospectus and any accompanying prospectus supplement are excluded
from the safe harbor protection provided by Section 27A of the 1933 Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Currently
known risk factors that could cause actual results to differ materially from our expectations include, but are not limited to,
the factors described in the &ldquo;Investment Objective and Policies&rdquo; and &ldquo;Risk Factors and Special Considerations&rdquo;
sections of this prospectus. We urge you to review carefully those sections for a more detailed discussion of the risks of an
investment in our securities.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>MANAGEMENT
OF THE FUND</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Board
of Directors</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The board
is responsible for the overall management of the Fund, including oversight of the Adviser and other service providers. There are
five directors of the Fund. One of the directors is an &ldquo;interested person&rdquo; (as defined in the 1940 Act). A director
who is not an &quot;interested persons&quot; is referred to as an &quot;Independent Director.&quot; Information about both the
Fund&rsquo;s directors and officers is set forth in the tables below. Unless otherwise noted, the mailing address of each director
and officer is c/o The Herzfeld Caribbean Basin Fund, Inc., 119 Washington Avenue, Suite 504, Miami Beach, FL, 33139.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Information
About Directors and Officers</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt"><B>Name and Age</B></FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt"><B>Position(s) Held with Fund</B></FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt"><B>Term of Office* and Length of Time Served</B></FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom; width: 30%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt"><B>Principal Occupation(s) During Past 5 Years</B></FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt"><B>Number of Portfolios in Complex Overseen by Director</B></FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt"><B>Other Directorships Held by Director</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 11pt"><B>Independent Directors</B></FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">John A. Gelety <BR>
Age: 49</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Director</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Current term expires 2019; 2011 to present.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Attorney and shareholder at Greenspoon Marder, P.A., corporate practice group, 2016-present;
    John A. Gelety, PA, a transactional law firm, 2005-2016.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">1</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">None</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Cecilia L. Gondor</FONT></P>
        <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Age: 55</FONT></P></TD>
    <TD><FONT STYLE="font-size: 11pt">Director</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Current term expires 2018; 2014 to present.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Managing Member of L&amp;M Management, a real estate management business, 2014-present.
    Executive Vice President of Thomas J. Herzfeld Advisors, Inc., 1984-2014.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">1</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">None</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Ann S. Lieff</FONT></P>
        <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Age: 65</FONT></P></TD>
    <TD><FONT STYLE="font-size: 11pt">Director</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Current term expires 2019; 1998 to present.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">President of the Lieff Company, a management consulting firm that offers ongoing advisory
    services as a corporate director, 1998-present; former CEO Spec&rsquo;s Music, 1980-1998, a retailer of recorded music.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">1</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">None</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Kay W. Tatum, Ph.D., CPA</FONT></P>
        <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Age: 65</FONT></P></TD>
    <TD><FONT STYLE="font-size: 11pt">Director</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Current term expires 2018; 2007 to present.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Associate Professor of Accounting, University of Miami School of Business Administration,
    1992-present; Chair, Department of Accounting, 2004-2008; Assistant Professor of Accounting, University of Miami, 1986-1992.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">1</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">None</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD COLSPAN="2"><FONT STYLE="font-size: 11pt"><B>Interested Director</B></FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Thomas J. Herzfeld**</FONT></P>
        <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Age: 73</FONT></P></TD>
    <TD><FONT STYLE="font-size: 11pt">Chairman, Director and Portfolio Manager</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Current term expires 2020; 1993 to present.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Thomas J. Herzfeld Advisors, Inc., serving as Chairman, 1984-present; Portfolio Manager,
    1984-present; and President, 1984-2016.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">2</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">The Cuba Fund, Inc. (in registration)</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt"><B>Officers:</B></FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Erik M. Herzfeld</FONT></P>
        <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Age: 43</FONT></P></TD>
    <TD><FONT STYLE="font-size: 11pt">Portfolio Manager; President</FONT></TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">2007 to present;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">2016 to present.</FONT></P></TD>
    <TD><FONT STYLE="font-size: 11pt">Thomas J. Herzfeld Advisors, Inc., serving as President, 2016-present; Portfolio Manager,
    2007-present; and Managing Director, 2007-2015; Vice President JPMorgan Chase 2000-2007, foreign exchange options trading.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">N/A</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Strategic Investment Partners, Inc.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Reanna J. M. Lee</FONT></P>
        <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt">Age: 31</FONT></P></TD>
    <TD><FONT STYLE="font-size: 11pt">Secretary, Treasurer, CCO</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Officer since 2014.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Thomas J. Herzfeld Advisors, Inc., serving as In-house counsel, 2012-present; and Chief
    Compliance Officer, 2013-present.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">N/A</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">N/A</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">*</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Each director serves a three-year term after which the director may be
    re-elected for additional three-year terms.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">**</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">An &ldquo;interested person&rdquo; of the Fund (as defined in the 1940 Act) because he is
    a control person, director and employee of the Fund&rsquo;s investment adviser.</FONT></TD></TR>
</TABLE>




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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Thomas
J. Herzfeld is an &ldquo;interested person&rdquo; (as such term is defined in the 1940 Act) who currently serves as the
Chairman of the board. The board believes that Mr. Herzfeld&rsquo;s service as Chairman is appropriate and benefits
stockholders due to his personal and professional stake in the quality of services provided to the Fund. The independent
directors believe that they can act independently and effectively without having an independent director serve as Chairman.
Nonetheless, as currently composed, the independent directors constitute a substantial majority of the board.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The board
believes that the significance of each director&rsquo;s experience, qualifications, attributes or skills is an individual matter
(meaning that experience that is important for one director may not have the same value for another) and that these factors are
best evaluated at the board level, with no single director, or particular factor, being indicative of the Board&rsquo;s effectiveness.
The board determined that each of the directors is qualified to serve as such based on a review of the experience, qualifications,
attributes and skills of each director. In reaching this determination, the board has considered a variety of criteria, including,
among other things: character and integrity; ability to review critically, evaluate, question and discuss information provided,
to exercise effective business judgment in protecting stockholder interests and to interact effectively with the other directors,
the Adviser, other service providers, counsel and the independent registered accounting firm or independent accountants; and willingness
and ability to commit the time necessary to perform the duties of a director. Each director&rsquo;s ability to perform his or
her duties effectively is evidenced by his or her experience or achievements in the following areas: management or board experience
in the investment management industry or companies or organizations in other fields, educational background and professional training;
and experience as a director of the Fund. In addition, the board values the diverse skill sets and experiences that each director
contributes. The board considers that its diversity as a whole is as a result of a combination of directors and the various perspectives
that each director provides as a result of his or her present experiences and his or her background. Information discussing the
specific experience, skills, attributes and qualifications of each director which led to the board&rsquo;s determination that
the directors should serve in this capacity is provided below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Thomas J.
Herzfeld has served as Chairman of the board since inception of The Herzfeld Caribbean Basin Fund, Inc. in 1993. In addition,
he is the Chairman and President of Thomas J. Herzfeld Advisors, Inc., the Fund&rsquo;s investment adviser. Mr. Herzfeld entered
the securities industry in 1968, was founder of a New York Stock Exchange member firm in 1970 and was the Chairman and President
of FINRA member firm Thomas J. Herzfeld &amp; Co., Inc., formed in 1981.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Ann S. Lieff
joined the board in 1998. Ms. Lieff is President of Lieff Company, a management consulting firm that offers ongoing advisory services
as a corporate director to several retail operations. Previously she served as Chief Executive Officer of Spec&rsquo;s Music for
18 years, from 1980-1998; Specs was one of the largest music retail chain stores in the Southeastern region of the United States
for many decades.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Kay W. Tatum,
Ph.D., CPA, joined the board in 2007. Dr. Tatum is an Associate Professor of Accounting at the University of Miami School of Business
Administration, where she has been since 1986. She also served as Chair of the Department of Accounting from 2004 to 2008.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">John A.
Gelety, Esq. joined the board in 2011. Mr. Gelety is a practicing attorney who specializes in business law, with a concentration
on domestic and cross-border mergers &amp; acquisitions, private equity and commercial transactions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Cecilia
L. Gondor joined the board in 2014. Ms. Gondor is a Managing Member of L&amp;M Management, a real estate management business.
Ms. Gondor served as the Secretary/Treasurer of Fund since its inception until her retirement in May 2014. She also served as
Executive Vice President of the Adviser from 1984 through the date of her retirement. Additionally, she was the Executive Vice
President of Thomas J. Herzfeld &amp; Co., Inc., a broker-dealer, from 1984 through 2010, when the broker-dealer ceased operations.
Ms. Gondor is a freelance financial writer, including topics related to closed-end funds.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Specific
details regarding each director&rsquo;s principal occupations during the past five years are included in the table above. The
summaries set forth above as to the experience, qualifications, attributes and/or skills of the directors do not constitute holding
out the board or any director as having any special expertise or experience, and do not impose any greater responsibility or liability
on any such person or on the board as a whole than would otherwise be the case.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt"><U>Risk
Oversight</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">While
responsibility for the day-to-day operations for the Fund, including certain risk management functions addressed in policies and
procedures relating to the Fund, resides with the Adviser, the board actively performs a risk oversight function, both directly
and through its committees, as described below. The board and its audit committee (the &quot;audit committee&quot;) exercise a
risk oversight function through regular and ad hoc board and audit committee meetings during which the board and the audit committee
meet with representatives of the Adviser and other service providers. The board also periodically receives reports regarding the
Fund's and the Adviser's policies and procedures, and reviews and approves changes to Fund's policies and procedures. The audit
committee also meets regularly with the Fund's independent registered public accounting firm to discuss internal controls and
financial reporting matters, among other things. The board and audit committee routinely receive reports from the Fund's officers
and the Adviser on a variety of other risk areas relating to the Fund, including, without limitation, investment risks, liquidity
risks, valuation risks and operational risks, as well as more general business risks. In addition, the board consults with Fund
counsel both during and, to the extent required, between meetings of the board and the audit committee.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
board also meets regularly with the Fund's Chief Compliance Officer (&quot;CCO&quot;), who reports directly to the board. The
CCO has responsibility for annually testing the compliance procedures of the Fund and its service providers. The CCO regularly
discusses issues related to compliance and provides a quarterly report to the board regarding certain Fund compliance matters.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Committees
of the Board</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The board
has formed an Audit Committee and a Nominating Committee.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The board
has adopted a written charter for the Audit Committee, which became effective February 5, 2004. The Audit Committee of the board
currently consists of Mr. Gelety, Ms. Gondor, Ms. Lieff and Dr. Tatum, none of whom is an &ldquo;interested person&rdquo; of the
Fund. Each member of the Audit Committee is considered independent under the applicable NASDAQ Capital Market listing standards.
During the fiscal year ended June 30, 2017 the Audit Committee met two times. The Audit Committee reviews the scope of the audit
by the Fund&rsquo;s independent accountants, confers with the independent accountants with respect to the audit and the internal
accounting controls of the Fund and with respect to such other matters as may be important to an evaluation of the audit and the
financial statements of the Fund, and makes recommendations with respect to the selection of the independent accountants for the
Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Nominating
Committee is comprised of Mr. Gelety, Ms. Gondor, Ms. Lieff, and Dr. Tatum, each of whom is an independent director under the
1940 Act and under NASDAQ Capital Market listing standards. During the fiscal year ended June 30, 2017, the Nominating Committee
met once. The Nominating Committee is responsible for reviewing and recommending qualified candidates in the event that a directorship
is vacated or created. The Nominating Committee will not consider nominees recommended by stockholders. The Nominating Committee
believes that candidates for director should have certain minimum qualifications, including (i) the ability to apply good business
judgment; (ii) the ability to properly exercise their duties of loyalty and care; (iii) proven leadership capabilities, high integrity
and moral character, significant business experience and a high level of responsibility within their chosen fields; (iv) the ability
to quickly grasp complex principles of business, finance, international transactions and the regulatory environment in which investment
companies must operate; and (v) the ability to read and understand basic financial statements. The Nominating Committee retains
the right to modify these minimum qualifications from time to time. In general, candidates will be preferred who hold an established
senior or executive level position in business, finance, law, education, research or government. The Nominating Committee&rsquo;s
process for identifying and evaluating nominees is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In the case
of incumbent directors whose terms of office are set to expire, the Nominating Committee reviews such directors&rsquo; overall
service to the Fund during their term, including the number of meetings attended, level of participation, quality of performance,
and transactions of such directors with the Fund, if any, during their term, and confirms their independence, if applicable. In
the case of new director candidates, the committee first determines whether the nominee must be independent for purposes of The
NASDAQ Capital Market and whether the candidate must be considered an independent director under the 1940 Act. In either case,
determinations are based upon the Fund&rsquo;s charter and bylaws, applicable securities laws, the rules and regulations of the
SEC, and the advice of counsel, if necessary. The Committee then uses its network of contacts to compile a list of potential candidates,
but may also engage, if it deems appropriate, a professional search firm. The Committee then meets to discuss and consider such
candidates&rsquo; qualifications and recommend the nominee.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Ownership
of the Fund by Directors </U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Set forth
in the following table are the directors of the Fund, together with the dollar range of equity securities beneficially owned by
each director as of June 30, 2017, as well as the aggregate dollar range of equity securities in all funds overseen or to be overseen
in a family of investment companies (i.e., funds managed by the Adviser).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"></FONT></P>

<TABLE CELLPADDING="2" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 11pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 66%; font-weight: bold; border-bottom: Black 1pt solid; text-align: center">Name of Director</TD><TD STYLE="width: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 15%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Dollar Range of Equity Securities in the Fund</TD><TD STYLE="width: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 15%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Aggregate Dollar Range of Equity Securities in All Funds in Family of Investment Companies</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left">Independent Directors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: left">John A. Gelety</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$10,001-50,000</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$10,001-50,000</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cecilia L. Gondor</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$10,001-50,000</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$10,001-50,000</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: left">Ann S. Lieff</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$50,001-100,000</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$50,001-100,000</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Kay W. Tatum</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$0-10,000</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$0-10,000</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="font-weight: bold; text-align: left">Interested Director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Thomas J. Herzfeld</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Over $100,000</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Over $100,000</TD></TR>
</TABLE>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">None of
the independent directors, and no immediate family member of any independent director, own beneficially or of record any securities
of the Fund&rsquo;s Adviser, or any person directly or indirectly controlling, controlled by, or under common control with the
Adviser.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">As of June
30, 2017, directors (5 persons) beneficially owned an aggregate of 6.06% of the Fund&rsquo;s outstanding shares on that date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Director
Compensation</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Our board
of directors held four regular meetings during the Fund's fiscal year ended June 30, 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">For the
fiscal year ended June 30, 2017, the aggregate director compensation paid by the Fund was $121,000. The compensation paid by the
Fund to each of its directors serving during the fiscal year ended June 30, 2017 is set forth in the table below. Directors are
also reimbursed for related business expenses. Directors who are current employees or officers of the Fund&rsquo;s investment
adviser (currently Mr. Herzfeld) are not paid compensation for their service as a director. None of the other directors serves
on the board of any other registered investment company to which the Adviser or an affiliated person of the Adviser provides investment
advisory services. Directors and officers of the Fund do not receive pension or retirement benefits from the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 52%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Name of
    Person and </B><BR>
    <B>Position with the Fund</B></FONT></TD>
    <TD NOWRAP STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="width: 15%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Aggregate
    Compensation </B><BR>
    <B>from the Fund</B></FONT></TD>
    <TD NOWRAP STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="width: 15%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Pension
    or Retirement </B><BR>
    <B>Benefits Accrued As </B><BR>
    <B>Part of Fund Expenses</B></FONT></TD>
    <TD NOWRAP STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="width: 15%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Total Compensation
    from </B><BR>
    <B>the Fund and Fund </B><BR>
    <B>Complex Paid to Directors</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt"><B>Independent Directors</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;John A. Gelety</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$29,500</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$0</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$29,500</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;Cecilia L. Gondor</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt"> </FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$29,500</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$0</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$29,500</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;Ann S. Lieff</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$29,500</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$0</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$29,500</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;Kay W. Tatum</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$32,500</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$0</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$32,500</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt"><B>Interested Director</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;Thomas J. Herzfeld</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$0</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$0</FONT></TD>
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$0</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Investment
Adviser and Portfolio Managers</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Investment
Adviser</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white; text-align: justify"><FONT STYLE="font-size: 11pt">The
Fund is advised by HERZFELD/CUBA (the &ldquo;Adviser&rdquo;), a division of Thomas J. Herzfeld Advisors, Inc., whose principal
business address is 119 Washington Avenue, Suite 504 Miami Beach, FL 33139. The Adviser has been providing advisory services to
the Fund since our registration under the 1940 Act. Thomas J. Herzfeld Advisors, Inc. has provided advisory services since 1984
and is beneficially owned by Thomas J. Herzfeld, as the sole voting stockholder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Pursuant
to an investment advisory agreement with the Fund (the &ldquo;Investment Advisory Agreement&rdquo;) and under the direction and
control of the board, the Adviser manages the Fund&rsquo;s portfolio and makes investment decisions pursuant to the Fund&rsquo;s
stated investment objective, policies and restrictions. The Adviser is authorized to transmit purchase and sale orders and select
brokers and dealers to execute portfolio transactions on behalf of the Fund. The Adviser determines the timing of portfolio transactions
and other matters related to execution.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Portfolio
Managers</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Thomas J.
Herzfeld currently serves as the Chairman, Director and Portfolio Manager of the Fund. Mr. T. Herzfeld has managed the Fund since
our registration under the 1940 Act. In addition, Mr. T. Herzfeld has served as the Chairman of the Adviser since 1984. Prior
to these positions, he served as the President of the Adviser from 1984 to 2016. He also served as Chairman and President of Thomas
J. Herzfeld &amp; Co., Inc. an affiliated broker/dealer (that ceased operations in 2010) from 1981-2010. Prior to these positions
Mr. Herzfeld was Executive Vice President and Director of a New York Stock Exchange member firm. Mr. T. Herzfeld has authored
or edited a number of books, including The Investors Guide to Closed-End Funds (McGraw Hill, 1980), Herzfeld&rsquo;s Guide to
Closed End Funds (McGraw Hill, 1993) and co-authored High Return, Low Risk Investment (1st edition, G.P. Putnam&rsquo;s Sons,
1981 and 2nd edition, McGraw Hill, 1993). He is considered the first and a leading expert in the field of closed-end funds. Mr.
T. Herzfeld has been quoted in thousands of articles and written hundreds of articles on the subject of closed end funds. He has
written periodically for <I>Barron&rsquo;s</I> and has made television appearances on <I>Wall Street Week, The Nightly Business
Report</I> and <I>CNBC</I>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Erik M.
Herzfeld currently serves as President and Portfolio Manager of the Fund. Mr. E. Herzfeld has managed the Fund since 2008. In
addition, Mr. E. Herzfeld has served as President of the Adviser since February 2016. Mr. E. Herzfeld formerly served as Managing
Director of the Adviser since 2007. Prior to these positions he had served in quantitative research, trading and management roles
with Lehman Brothers and JPMorgan and was based in New York and Asia.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">Messrs.
T. Herzfeld and E. Herzfeld are primarily responsible for the day-to-day management of the Fund.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">As
of June 30, 2017, Mr. T. Herzfeld and Mr. E. Herzfeld were also portfolio managers for approximately 268 other accounts comprising
$226 million under management, 0 pooled investment vehicles comprising $0 under management, and one other investment company comprising
approximately $66 million under management. However, none of these accounts are managed with an investment strategy similar to
the Fund's. As of the same date, the Fund had total assets of approximately $51 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
Fund does not believe that any material conflicts are likely to arise through Mr. T. Herzfeld's or Mr. E. Herzfeld's management
of other accounts in addition to the Fund in that there is very little overlap in the type of investments made for the Fund and
other accounts, which generally trade shares of closed-end funds. The Fund is permitted, to a limited extent, to buy shares of
other closed-end funds and occasionally other clients or Mr. T. Herzfeld may buy shares of securities also held in the portfolio
of the Fund. The Adviser and the Fund have adopted procedures overseen by the CCO intended to monitor compliance with such policies
which include conflicts which may occur regarding allocation of investment opportunities between the Fund and other accounts.
The CCO of the Fund reports directly to the board at least annually.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">Mr.
T. Herzfeld and Mr. E. Herzfeld receive no direct compensation from the Fund for their services as Portfolio Managers. Mr. T.
Herzfeld owns 100% of the voting stock of the Adviser, a Subchapter S Corporation, therefore he is taxed on its profits. Portfolio
managers, other than Mr. T. Herzfeld, are paid a fixed salary by the Adviser. In addition, the Adviser retains the ability to
pay bonuses based on the overall profitability of the Adviser, however, compensation is not directly based upon the performance
of a particular client or account, including the Fund's performance, nor the value of a particular client or account, including
the value of the Fund's assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
range of value of shares of the Fund owned by Mr. T. Herzfeld as of June 30, 2017 was over $1,000,000. The range of value of shares
of the Fund owned by Mr. E. Herzfeld as of June 30, 2017 was $500,001-$l,000,000.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Investment
Advisory Agreement</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Investment
Advisory Agreement sets forth the services to be provided by the Adviser as described above. Pursuant to the Investment Advisory
Agreement, the Adviser is entitled to an advisory fee paid by the Fund at the annual rate of 1.45% of the Fund&rsquo;s average
weekly net assets and payable at the end of each month. That fee is higher than the advisory fee paid by most investment companies.
For the fiscal years ended June 30, 2017, 2016 and 2015, the Adviser received $665,528, $560,707, and $558,086, respectively,
for investment advisory services provided to the Fund pursuant to the Investment Advisory Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Investment
Advisory Agreement was last approved by the board on August 10, 2017. A discussion regarding the basis for the board&rsquo;s approval
of the Investment Advisory Agreement is provided in the Fund&rsquo;s Semi-Annual Report to stockholders for the semi-annual report
period in which the approval occurred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Investment
Advisory Agreement provides that the Adviser bears all expenses of its employees and overhead incurred by it in connection with
its duties thereunder. The Fund reimburses approximately $26,913 per fiscal year for compliance services performed by the Chief
Compliance Officer. Except with respect to the reimbursement for compliance services, the Adviser pays the salaries and expenses
of officers and directors of the Fund who are current employees or officers of the Adviser. The Fund bears all of its own expenses
(See &ldquo;Expenses of the Fund&rdquo; below).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The services
of the Adviser under the Investment Advisory Agreement are not deemed to be exclusive, and nothing in the Investment Advisory
Agreement prevents the Adviser or any affiliate thereof, from providing similar services to other investment companies and other
clients (whether or not their investment objectives and policies are similar to those of the Fund) or from engaging in other activities.
When other clients of the Adviser desire to purchase or sell a security at the same time the security is purchased for or sold
by the Fund, such purchases and sales are to the extent feasible, allocated among such clients and the Fund in a manner believed
by the Adviser to be equitable to the Fund. The allocation of securities may adversely affect the price and quality of purchases
and sales of securities by the Fund. Purchase and sale orders for the Fund may be combined with those of other clients of the
Adviser in the interest of the most favorable results for the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Investment
Advisory Agreement was initially approved by the board on June 24, 1993. The Agreement continued in effect for a period of two
years from the effective date and thereafter it is required to be approved annually by the board. The Investment Advisory Agreement
continues in effect for successive periods of 12 months, provided that its continuance is specifically approved annually by (i)
the vote of a majority of the board who are not parties to such agreement or interested persons (as such term is defined in the
1940 Act) of the Adviser, cast in person at a meeting called for the purpose of voting on such approval and (ii) either (a) the
vote of a majority of the outstanding voting securities of the Fund or (b) the vote of a majority of the board. The Investment
Advisory Agreement may be terminated by the Fund, without the payment of any penalty, upon vote of a majority of the board or
a majority of the outstanding voting securities of the Fund at any time upon net less than 60 days&rsquo; prior written notice
to the Adviser, or by the Adviser upon not less than 60 days&rsquo; prior written notice to the Fund. The Investment Advisory
Agreement terminates automatically in the event of its assignment (as such term is defined in the 1940 Act) by either party or
upon its termination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Adviser
is not liable for any act of omission, error of judgment, mistake of law or loss suffered by the Fund or its investors in connection
with the matters to which the Investment Advisory Agreement relates, except for a loss resulting from willful misfeasance, bad
faith or gross negligence in the performance of, or from reckless disregard of, its obligations and duties under the Investment
Advisory Agreement, or a loss resulting from a breach of fiduciary duty with respect to receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount set forth in Section 36 (b) (3) of the 1940 Act).</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Adviser
also performs and arranges for the performance of certain administrative and accounting functions for the Fund, including (i)
providing persons satisfactory to the directors of the Fund to serve as officers and, in that capacity, manage the daily operations
of the Fund; (ii) processing the payment of expenses for the Fund; (iii) supervising the preparation of periodic reports to the
Fund&rsquo;s stockholders; (iv) preparing materials for Fund board and committee meetings; (v) supervising the pricing of the
Fund&rsquo;s investment portfolio and the publication of the NAV of the Fund&rsquo;s shares, earnings reports and other financial
data; (vi) monitoring relationships with organizations providing services to the Fund, including the custodian, transfer agent,
auction agent and printers; (vii) supervising compliance by the Fund with record-keeping requirements under the 1940 Act and regulations
thereunder, maintaining books and records for the Fund (other than those maintained by the Adviser, custodian and/or transfer
agent) and preparing and filing of tax reports other than the Fund&rsquo;s income tax returns; and (viii) providing executive,
clerical and secretarial help needed to carry out these responsibilities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Benefit
to the Adviser</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
Adviser will benefit from any Offer because the Adviser&rsquo;s fee is based on the average net assets of the Fund. It is not
possible to state precisely the amount of additional compensation the Adviser will receive as a result of any Offer because the
proceeds of such Offer will be invested in additional portfolio securities which will fluctuate in value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Rights
Offerings</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may, in the future and at its discretion, choose to make rights offerings from time to time for a number of shares and on terms
which may or may not be similar to any Offer. Any such future rights offering will be made in accordance with the 1940 Act. Under
the laws of Maryland, the state in which the Fund is organized, the board is authorized to approve rights offerings without obtaining
stockholder approval. The staff of the SEC has interpreted the 1940 Act as not requiring stockholder approval of a rights offering
at a price below the then current NAV so long as certain conditions are met, including a good faith determination by a board that
such offering would result in a net benefit to existing stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Expenses
of the Fund</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Except as
indicated above, the Fund pays all of its expenses, including but not limited to the following: organizational and certain offering
expenses (but not overhead or employee costs of the Adviser); advisory fees payable to the Adviser; fees and out-of-pocket travel
expenses of the Fund&rsquo;s directors who are not interested persons (as such term is defined in the 1940 Act) of any other party
and other expenses incurred by the Fund in connection with directors&rsquo; meetings; interest expense; charges and expenses of
the Fund&rsquo;s legal counsel and independent accountants; taxes and governmental fees; brokerage and other expenses connected
with the execution, recording and settlement of portfolio security transactions; expenses of repurchasing shares; expenses of
issuing any preferred shares or indebtedness; expenses connected with negotiating, effecting purchase or sale, or registering
privately issued portfolio securities; membership dues to professional organizations; premiums allocable to fidelity bond and
D&amp;O insurance coverage; expenses of preparing stock certificates; expenses of registering and qualifying the Fund&rsquo;s
shares for sale with the SEC and in various states and foreign jurisdictions; custodian, sub-custodian, dividend paying agent,
transfer agency expenses; payment for portfolio pricing services to a pricing agent; expenses of printing and mailing share certificates,
stockholder reports, notices, proxy statements and reports to governmental offices; expenses of stockholders&rsquo; meetings and
preparing and distributing proxies and reports to stockholders; any litigation expenses; expenses relating to investor and public
relations; and NASDAQ Capital Market listing fees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>PORTFOLIO
TRANSACTIONS AND BROKERAGE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In portfolio
transactions involving equity securities, the Adviser places orders on behalf of the Fund directly with brokers, which may include
brokers affiliated with the Adviser, except that the purchase of shares in rights offerings is made directly from the issuer.
The Adviser may manage other accounts and funds that invest in equity securities of Caribbean Basin Companies. Although investment
decisions for the Fund are made independently from those of other accounts or funds managed by the Adviser, investments of the
type the Fund may make may also be made by those other accounts and funds. When the Fund and one or more accounts or funds managed
by the Adviser are prepared to invest in, or desire to dispose of, the same security, available investments or opportunities for
each will be allocated in a manner believed by the Adviser to be equitable to each. In some cases, this procedure may affect adversely
the price paid or received by the Fund or the size of the position obtained or disposed of by the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The primary
objective of the Adviser in placing orders for the purchase and sale of securities for the Fund&rsquo;s portfolio is to obtain
best execution taking into account such factors as price, commission, size of order, difficulty of execution and skill required
of the broker or dealer. The capability and financial condition of the broker or dealer may also be criteria for the choice of
that broker or dealer. Subject to obtaining the best execution, brokers, who provide investment research services to the Adviser,
including market and statistical information and quotations for portfolio evaluation purposes, may receive orders for transactions
of the Fund. The terms &ldquo;investment research&rdquo; and &ldquo;market and statistical information and quotations&rdquo; include
advice as to the value of securities, the advisability of investing in, purchasing or selling securities, and the availability
of securities and potential buyers or sellers of securities, as well as the furnishing of analyses and reports concerning issuers,
industries, securities, economic factors and trends, and portfolio strategy. Neither the Fund nor the Adviser is obligated to
deal with any broker or group of brokers for the execution of portfolio transactions.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Research
provided to the Adviser in advising the Fund will be in addition to and not in lieu of the services required to be performed by
the Adviser itself, and the Adviser&rsquo;s fees will not be reduced as a result of the receipt of supplemental information. This
information is regarded as only supplementary to the Adviser&rsquo;s own research effort, since the information must be analyzed,
weighed and reviewed by the Adviser&rsquo;s staff. This information may be useful to the Adviser in providing services to clients
other than the Fund, and not all such information will necessarily be used by the Adviser in connection with the Fund. Conversely,
information provided to the Adviser by brokers and dealers through whom other clients of the Adviser effect securities transactions
may prove useful to the Adviser in providing services to the Fund. The board will review at least annually the commissions allocated
by the Adviser on behalf of the Fund to determine if such allocations were reasonable in relation to the benefits inuring to the
Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">During the
fiscal years ended 2017, 2016, and 2015, the Fund paid $5,445.55, $1,916, and $4,891, respectively, in brokerage commissions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">Persons
or organizations beneficially owning 25% or more of the outstanding shares of the Fund could be presumed to &ldquo;control&rdquo;
the Fund. As a result, those persons or organizations could have the ability to take action with respect to the Fund without the
consent or approval of other stockholders. As of April 30, 2018, there were 82 record holders of the Fund's common stock. To the
knowledge of the Fund, as April 30, 2018, Thomas J. Herzfeld beneficially owned 442,342 shares of common stock, or 7.21% of the
voting securities of the Fund. The address for Mr. T. Herzfeld is 119 Washington Avenue, Suite 504, Miami Beach, FL 33139. To
our knowledge, as of April 30, 2018, no other person or entities owned of record or beneficially more than 5% of our outstanding
voting securities except that, based on a 13G filing through the date of this prospectus, the following information with respect
to beneficial ownership of more than 5% of the outstanding voting shares has been reported:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 25%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt"><B>Title
    of Class</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 23%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt"><B>Name
    and Address*</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 23%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt"><B>Percentage
    Ownership of Fund*</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 23%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt"><B>Total
    Number of Shares*</B></FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt">Common Stock</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">City of London Investment
        Group PLC (&ldquo;CLIG&rdquo;) and City of London Investment Management Company Limited (&ldquo;CLIM&rdquo;)</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">77 Gracechurch Street,
        London England</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">ECV 0 AS</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"></FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt">8.0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 11pt">488,000</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt">*</FONT></TD><TD><FONT STYLE="font-size: 11pt">Information derived from
Schedule 13G filing dated February 9, 2018.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">Our
officers and directors, as a group, owned an aggregate of 611,589 shares of our common stock, or 9.97% of the voting securities
of the Fund, as of April 30, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt"><B>REGULATION
AS A REGISTERED CLOSED-END MANAGEMENT INVESTMENT COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt"><B>General</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">We
are a non-diversified closed-end management investment company that has registered as an investment company under the 1940 Act.
As a registered closed-end investment company, we are subject to regulation under the 1940 Act. Under the 1940 Act, unless authorized
by vote of a majority of the outstanding voting securities, we may not:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">change
our classification to an open-end management investment company;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.05in; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">except in each case in
accordance with our policies with respect thereto set forth in this prospectus (see &ldquo;Investment Objective and Policies &ndash;
Investment Restrictions&rdquo;), borrow money, issue senior securities, underwrite securities issued by other persons, purchase
or sell real estate or commodities or make loans to other persons;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.05in; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">deviate from any policy
in respect of concentration of investments in any particular industry or group of industries as recited in the prospectus, deviate
from any investment policy which is changeable only if authorized by stockholder vote under the 1940 Act, or deviate from any
fundamental policy recited in its registration statement in accordance with the requirements of the 1940 Act; or</FONT></TD>
</TR></TABLE>



<!-- Field: Page; Sequence: 37; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 0pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">change the nature of our
business so as to cease to be an investment company.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.05in; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">A
majority of the outstanding voting securities of a company is defined under the 1940 Act as the lesser of: (a) 67% or more of
such company's voting securities present at a meeting if more than 50% of the outstanding voting securities of such company are
present or represented by proxy, or (b) more than 50%) of the outstanding voting securities of such company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">As
with other companies regulated by the 1940 Act, a registered closed-end management investment company must adhere to certain substantive
regulatory requirements. A majority of our directors must be persons who are not interested persons, as that term is defined in
the 1940 Act. Additionally, we are required to provide and maintain a bond issued by a reputable fidelity insurance company to
protect the closed-end management investment company. Furthermore, as a registered closed-end management investment company, we
are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person's office. We may also be
prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval
of our directors who are not interested persons and, in some cases, prior approval by the SEC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">As
a registered closed-end management investment company, we are generally required to meet an asset coverage ratio with respect
to our outstanding senior securities representing indebtedness, defined under the 1940 Act as the ratio of our gross assets (less
all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities representing indebtedness,
of at least 300% after each issuance of senior securities representing indebtedness. In addition, we are generally required to
meet an asset coverage ratio with respect to any outstanding preferred stock, as defined under the 1940 Act as the ratio of our
gross assets (less all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities
representing indebtedness, plus the aggregate involuntary liquidation preference of any outstanding preferred stock, of at least
200% immediately after each issuance of preferred stock. We are also prohibited by the 1940 Act from issuing or selling any senior
security if, immediately after such issuance, we would have outstanding more than (i) one class of senior security representing
indebtedness, exclusive of any promissory notes or other evidences of indebtedness issued in consideration of any loan, extension,
or renewal thereof, made by a bank or other person and privately arranged, and not intended to be publicly distributed, or (ii)
one class of senior security which is stock, except that in each case any such class of indebtedness or stock may be issued in
one or more series. Under the Fund's articles of incorporation, the Fund only issues common stock and is not currently permitted
to issue preferred stock and would only be permitted to do so after the Fund's articles of incorporation are revised or supplemented.
In addition to the 1940 Act requirements, the Fund is further limited in its ability to issue senior securities (including preferred
stock), pledge its assets or borrow money by its fundamental investment restrictions. Such investment restrictions are more restrictive
than the 1940 Act. See &quot;Investment Objective and Policies&mdash;Investment Restrictions&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">We
are generally not able to issue and sell our common stock at a price below net asset value per share. See &quot;Risk Factors and
Special Considerations&mdash;Risks Related to Offerings Pursuant to this Prospectus&quot;. We may, however, sell our common stock,
or at a price below the then-current net asset value of our common stock if our board determines that such sale is in our best
interests and the best interests of our stockholders, and our stockholders approve such sale. In addition, we may generally issue
new shares of our common stock at a price below net asset value in rights offerings to existing stockholders, in payment of dividends
and in certain other limited circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">As
a registered closed-end management investment company, we are generally limited in our ability to invest in any portfolio company
in which our investment adviser or any of its affiliates currently has an investment or to make any co-investments with our investment
adviser or its affiliates without an exemptive order from the SEC, subject to certain exceptions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">We
will be periodically examined by the SEC for compliance with the 1940 Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">As
a registered closed-end management investment company, we are subject to certain risks and uncertainties. See &quot;&quot;Risk
Factors and Special Considerations&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">For
more information on temporary investments we may make pending investment of funds in portfolio securities consistent with our
investment objective and strategies described in this prospectus and the accompanying prospectus supplement, see &quot;Investment
Objective and Policies&mdash;Investment Policies - General&mdash; Temporary Defensive Positions&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">For
more information about issuance of senior securities (including certain debt securities and/or preferred stock) by the Fund and
more information about our fundamental investment policies, see &quot;Investment Objective and Policies&mdash;Investment Restrictions&quot;.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><B>Code Of Ethics</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
and the Adviser have adopted a joint code of ethics pursuant to Rule 17j-1 under the 1940 Act. The code of ethics permits personnel
subject to the code to invest in securities, including securities that may be purchased or held by the Fund, subject to certain
conditions and restrictions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
code of ethics is available without charge, upon request, by contacting us by mail at 119 Washington Avenue, Suite 504 Miami Beach,
FL 33139, or by telephone at (800) TJH-FUND (toll-free) or (305) 271-1900, or at the SEC's Public Reference Room at 100 F Street,
NE, Washington, D.C. 20549, on the SEC's website at <I>http://www.sec.gov, </I>or, upon payment of a a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov or by writing the SEC&rsquo;s Public Reference Section, Washington,
D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090 or
toll free at 1 (800) SEC-0330.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt"><B>Compliance
Policies and Procedures</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">We
and our investment adviser have adopted and implemented written policies and procedures reasonably designed to detect and prevent
violation of the federal securities laws and are required to review these compliance policies and procedures annually for their
adequacy and the effectiveness of their implementation and designate a CCO to be responsible for administering the policies and
procedures. Reanna J. M. Lee currently serves as our CCO.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt"><B>Sarbanes-Oxley
Act of 2002</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
Sarbanes-Oxley Act of 2002 imposes a wide variety of regulatory requirements on publicly-held companies and their insiders. Many
of these requirements affect us. For example:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">pursuant to Rule 30a-2
of the 1940 Act, our chief executive officer and chief financial officer must certify the accuracy of the financial statements
contained in our periodic reports;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.05in; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">pursuant to Item 11 of
Form N-CSR and Item 2 of Form N-Q, our periodic reports must disclose our conclusions about the effectiveness of our disclosure
controls and procedures; and</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.05in; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">pursuant to Item 11 of
Form N-CSR and Item 2 of Form N-Q, our periodic reports must disclose whether there were significant changes in our internal controls
over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant deficiencies and material weaknesses.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.05in; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley
Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted
under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt"><B>Proxy
Voting Policies and Procedures</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">The
Fund&rsquo;s and the Adviser&rsquo;s proxy voting policies and procedures are attached hereto as Appendices A and B, respectively.
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended
June 30 is available without charge, upon request, by contacting us by mail at 119 Washington Avenue, Suite 504 Miami Beach, FL
33139, or by telephone at (800) TJH-FUND (toll-free) or (305) 271-1900, or at the SEC's Public Reference Room at 100 F Street,
NE, Washington, D.C. 20549, on the SEC's website at <I>http://www.sec.gov, </I>or, upon payment of a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to the SEC's Public Reference Section, Washington,
D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090 or
toll free at 1 (800) SEC-0330.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>DESCRIPTION
OF COMMON STOCK</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
is authorized to issue up to 100,000,000 shares of capital stock, at $.001 par value per share, all of which shares are classified
as common stock. The board is authorized, however, to classify and reclassify any unissued shares of capital stock by setting
or changing in any one or more respects the designation and number of shares of any such class or series, and the nature, rates,
amounts and times at which and the conditions under which dividends shall be payable on, and the voting, conversion, redemption
and liquidation rights of, such class or series and any other preferences, rights, restrictions and qualifications applicable
thereto.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
shares have no preemptive, conversion, exchange or redemption rights. Each share has equal voting, dividend, distribution and
liquidation rights. The shares outstanding are fully paid and nonassessable. Stockholders are entitled to one vote per share.
All voting rights for the election of directors are noncumulative, which means that the holders of more than 50% of the shares
can elect 100% of the directors then nominated for election if they choose to do so. In such event, the holders of the remaining
shares will not be able to elect any directors. The foregoing description and the description under &ldquo;Certain Provisions
of Articles of Incorporation and Bylaws&rdquo; below are subject to the provisions contained in the Fund&rsquo;s Articles of Incorporation
and Bylaws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD  STYLE="border-bottom: black 1pt solid; text-align: center; width: 25%"><FONT STYLE="font-size: 11pt"><B>Title of Class</B></FONT></TD>
    <TD  STYLE="text-align: justify; width: 1%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD  STYLE="border-bottom: black 1pt solid; text-align: center; width: 23%"><FONT STYLE="font-size: 11pt"><B>Authorized</B></FONT></TD>
    <TD  STYLE="text-align: justify; width: 1%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD  STYLE="border-bottom: black 1pt solid; text-align: center; width: 24%"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt"><B>Amount of Shares Held</B></FONT></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt"><B>by the Fund for its Account</B></FONT></P></TD>
    <TD  STYLE="text-align: justify; width: 1%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD  STYLE="border-bottom: black 1pt solid; text-align: center; width: 25%"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt"><B>Amount
                                         of Shares</B></FONT></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 11pt"><B>Outstanding
                                         as of April 30, 2018</B></FONT></P></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD  STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Shares of common stock</FONT></TD>
    <TD  STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD  STYLE="text-align: center"><FONT STYLE="font-size: 11pt">100,000,000</FONT></TD>
    <TD ><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD  STYLE="text-align: center"><FONT STYLE="font-size: 11pt">0 Shares</FONT></TD>
    <TD ><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD  STYLE="text-align: center"><FONT STYLE="font-size: 11pt">6,133,659 Shares</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
will consider offering additional shares in the future based on, among other things, the lifting or easing of economic sanctions
against Cuba. Other offerings of the Fund&rsquo;s shares, if made, will require approval of the board. Any additional offering
will be subject to the requirement of the 1940 Act that shares may not be sold at a price below the then current NAV, exclusive
of underwriting discounts and commissions, except in connection with an offering to existing stockholders or with the consent
of the holders of a majority of the Fund&rsquo;s outstanding voting securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Share
Repurchases and Tender Offers</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In recognition
of the possibility that the Fund&rsquo;s shares might trade at a discount to NAV, the board may determine that it would be in
the best interest of stockholders of the Fund to take action to attempt to reduce or eliminate a market value discount from NAV.
To that end, the board may take action from time to time either to repurchase Fund shares in open market or private transactions
or to make a tender offer for Fund shares at NAV. No assurance can be given that the directors will decide to undertake such repurchases
or tender offers, or that any such repurchases or tender offers would reduce any market discount. The board does not currently
intend to undertake repurchase or tenders offers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
anticipates that the market price of its shares generally will continue to vary from NAV. The market price of the Fund&rsquo;s
shares is determined by a number of factors, including the relative demand for and supply of such shares in the market, the Fund&rsquo;s
investment performance, the Fund&rsquo;s distributions and investor perception of the Fund&rsquo;s overall attractiveness as an
investment as compared with other investment alternatives. The fact that the Fund&rsquo;s shares may be the subject of share repurchases
or tender offers at NAV from time to time may reduce the spread between market price and NAV that otherwise might exist. In the
opinion of the Adviser, stockholders may be less inclined to accept a significant discount on sales of the Fund&rsquo;s shares
if they have a reasonable expectation of being able to recover NAV in conjunction with a possible share repurchase or tender offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Subject
to the Fund&rsquo;s investment restriction with respect to borrowing, the Fund may incur debt to finance repurchases and tenders.
See &ldquo;Investment Restrictions.&rdquo; If the Fund incurs debt to finance such repurchases and tenders, interest on any such
borrowings will reduce the Fund&rsquo;s net income. In addition, although the board believes that share repurchases and tenders
generally would have a favorable effect on the market price of the Fund&rsquo;s shares, the acquisition of shares by the Fund
will decrease the total assets of the Fund and therefore would have the effect of increasing the Fund&rsquo;s ratio of expenses
to average net assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">It is the
directors&rsquo; announced policy, which may be changed by the directors, that the Fund cannot accept tenders or effect repurchases
if (1) such transactions, if consummated, would (a) impair the Fund&rsquo;s status as a regulated investment company under the
Code (which would make the Fund a taxable entity, causing the Fund&rsquo;s income to be taxed at the Fund level in addition to
the taxation of stockholders who receive dividends from the Fund) or (b) result in a failure to comply with applicable asset coverage
requirements; (2) the amount of securities tendered would require liquidation of such a substantial portion of the Fund&rsquo;s
securities that the Fund would not be able to liquidate portfolio securities in an orderly manner in light of the existing market
conditions and such liquidation would have an adverse effect on the NAV of the Fund to the detriment of non-tendering stockholders;
(3) there is any (a) in the board&rsquo;s judgment, material legal action or proceeding instituted or threatened challenging such
transactions or otherwise materially adversely affecting the Fund, (b) declaration of a banking moratorium by federal or state
authorities or any suspension of payment by banks in the United States, (c) limitation affecting the Fund or the issuers of its
portfolio securities imposed by federal or state authorities on the extension of credit by lending institutions, (d) commencement
of war, armed hostilities or other international or national calamity directly or indirectly involving the United States, or (e)
in the board&rsquo;s judgment, other event or condition which would have a material adverse effect on the Fund or its holders
of common stock if shares of common stock were repurchased; or (4) the board determines that effecting any such transaction would
constitute a breach of their fiduciary duty owed the Fund or its stockholders. The directors may modify these conditions in light
of experience.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Any tender
offer made by the Fund for its shares will be at a price equal to at least 90% of the NAV of the shares as of the close of business
on the date the offer ends. Each offer will be made and stockholders notified in accordance&rsquo; with the requirements of the
Securities Exchange Act of 1934, as amended, and the 1940 Act, either by publication or mailing or both. Each offering document
will contain such information as is prescribed by such laws and the rules and regulations promulgated thereunder, including information
stockholders should consider in deciding whether or not to tender their shares and detailed instructions on how to tender shares.
When a tender offer is authorized to be made by the board, a stockholder wishing to accept the offer will be required to tender
all (but not less than all) of the shares owned by such stockholder (or attributed to the stockholder for Federal income tax purposes
under Section 318 of the Code). The Fund will purchase all shares tendered by a holder of shares at any time during the period
of the tender offer in accordance with the terms of the offer unless it determines to accept none of the shares tendered in the
tender offer (based upon one of the conditions set forth above). Each person tendering shares will pay to the Fund a reasonable
service charge currently anticipated to be $25.00, subject to change, to help defray the costs associated with affecting the tender
offer. It is the position of the staff of the SEC that such service charge may not be deducted from the proceeds of the purchase.
The Fund&rsquo;s transfer agent will receive the fee as an offset to these costs. The Fund expects that the cost to the Fund of
affecting a tender offer will exceed the aggregate amount of all service charges received from those who tender their shares.
Such excess costs associated with the tender offer will be charged against capital. During the period of a tender offer, the Fund&rsquo;s
stockholders will be able to determine the Fund&rsquo;s current NAV by use of a toll-free telephone number.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Shares that
have been accepted and purchased by the Fund pursuant to a tender offer or share repurchase will be held in the treasury until
retired by direction of the board. Treasury shares will be recorded and reported as an offset to stockholder&rsquo; equity and,
accordingly, will reduce the Fund&rsquo;s total assets. If treasury shares are retired, common stock issued and outstanding and
capital in excess of par will be reduced.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Because
of the nature of the Fund&rsquo;s investment objective and policies, if the Adviser anticipates that a share repurchase or tender
offer might have an adverse effect on the Fund&rsquo;s investment performance and anticipate any material difficulty disposing
of portfolio securities in order to consummate such share repurchase or tender offer, the board would consider deferring the share
repurchase or tender offer. If the Fund must liquidate portfolio securities in order to effect a share repurchase or tender offer,
the Fund&rsquo;s ability to achieve its investment objective may be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">If the Fund
must liquidate portfolio securities in order to purchase shares tendered, the Fund may realize gains and losses on securities
that it may not otherwise wish to sell in the ordinary course of its portfolio management, which may adversely affect the Fund&rsquo;s
yield. The portfolio turnover rate of the Fund may or may not be affected by the Fund&rsquo;s repurchases of shares pursuant to
a tender offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In the event
that the Fund engages in financial leveraging, the asset coverage requirements of the 1940 Act may restrict the Fund&rsquo;s ability
to engage in repurchases of its shares. With respect to senior securities consisting of debt, such requirements provide that no
purchases of shares may be made by the Fund unless, at the time of the purchase, the senior securities consisting of debt have
an asset coverage of at least 300% after deducting the amount of the purchase price.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Certain
Provisions of Articles of Incorporation and Bylaws</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
presently has provisions in its Articles of Incorporation and Bylaws (together, the &ldquo;Charter Documents&rdquo;) that could
have the effect of limiting (i) the ability of other entities or persons to acquire control of the Fund, (ii) the Fund&rsquo;s
freedom to engage in certain transactions or (iii) the ability of the Fund&rsquo;s directors or stockholders to amend the Charter
Documents or effect changes in the Fund&rsquo;s management. The Charter Documents also contain provisions which would inhibit
any conversion to an open-end investment company. The provisions of the Charter Documents may be regarded as &ldquo;anti-takeover&rdquo;
provisions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The board
is divided into three classes. The term of office of the first class expired on the date of the second annual meeting of stockholders,
the term of office of the second class expired on the date of the third annual meeting of stockholders and the term of office
of the third class expired on the date of the fourth annual meeting of stockholders, etc. Upon the expiration of the term of office
of each class as set forth above, the directors in such class will be elected for a term of three years to succeed the directors
whose terms of office expired. Accordingly, only those directors in one class may be changed in any one year, and such classification
may prevent replacement of a majority of the board for up to a two-year period (although under Maryland law procedures are available
for the removal of directors even if they are not then standing for re-election, and under SEC regulations, procedures are available
for including stockholder proposals in the annual proxy statement). Such system of electing directors is intended to have the
effect of maintaining the continuity of management and, thus, make it more difficult for the Fund&rsquo;s stockholders to change
the majority of the directors. A director may be removed from office only by a vote of at least 75% of the outstanding shares
of the Fund entitled to vote for the election of directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Under the
Fund&rsquo;s Articles of Incorporation, a vote of 75% (which is higher than that required under Maryland law or the 1940 Act)
of the outstanding shares of common stock of the Fund is required to authorize (i) any merger or consolidation of the Fund with
or into any other corporation; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets of the
Fund having an aggregate fair market value of $1,000,000 or more (other than in the regular course of its investment activities);
and (iii) any amendment to the Articles of Incorporation of the Fund which converts the Fund to an open-end investment company.
Any amendment to the Articles of Incorporation of the Fund which reduces the 75% vote required to authorize the enumerated actions
also must be approved by vote of the holders of 75% of the outstanding shares of common stock. If any of the foregoing actions
is approved by a vote of two-thirds of the directors who have served on the board for a period of at least 12 months, however,
the affirmative vote of the holders of a majority of the Fund&rsquo;s outstanding common stock will be sufficient to approve such
actions.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The provisions
of the Charter Documents described above could have the effect of depriving the owners of shares of opportunities to sell their
shares at a premium over prevailing market prices by discouraging a third party from seeking to obtain control of the Fund in
a tender offer or similar transaction. The overall effect of these provisions is to render more difficult the accomplishment of
a merger or the assumption of control by a principal stockholder. However, they provide the advantage of potentially requiring
persons seeking control of the Fund to negotiate with its management regarding the price to be paid and facilitating continuity
of the Fund&rsquo;s management, objective and policies. The board of the Fund has considered the forgoing provisions and concluded
that they are in the best interests of the Fund and its stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><B>Subscription Rights </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We may issue
subscription rights to holders of our common shares to purchase common shares. Subscription rights may be issued independently
or together with any other offered security and may or may not be transferable by the person purchasing or receiving the subscription
rights. In connection with a subscription rights offering to holders of our common shares, we would distribute certificates evidencing
the subscription rights and a prospectus supplement to our common stockholders as of the record date that we set for determining
the stockholders eligible to receive subscription rights in such subscription rights offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">The applicable prospectus supplement
would describe the following terms of subscription rights in respect of which this prospectus is being delivered:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">the period of time the offering would remain open (which will
    be open a minimum number of days such that all record holders would be eligible to participate in the offering and will not
    be open longer than 120&nbsp;days); </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">the title of such subscription rights; </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">the exercise price for such subscription rights (or method of
    calculation thereof); </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">the number of such subscription rights issued in respect of
    each common or preferred share; </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">the number of rights required to purchase a single common or
    preferred share; </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">the extent to which such subscription rights are transferable
    and the market on which they may be traded if they are transferable; </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">if applicable, a discussion of the material U.S.&nbsp;federal
    income tax considerations applicable to the issuance or exercise of such subscription rights; </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">the date on which the right to exercise such subscription rights
    will commence, and the date on which such right will expire (subject to any extension); </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">the extent to which such subscription rights include an over-subscription
    privilege with respect to unsubscribed securities and the terms of such over-subscription privilege; </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">any termination right we may have in connection with such subscription
    rights offering; and </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 20pt"><FONT STYLE="font-size: 11pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt">any other terms of such subscription rights, including exercise,
    settlement and other procedures and limitations relating to the transfer and exercise of such subscription rights. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Each subscription right would
entitle the holder of the subscription right to purchase for cash such number of shares at such exercise price as in each case
is set forth in, or be determinable as set forth in the prospectus supplement relating to the subscription rights offered thereby.
Subscription rights would be exercisable at any time up to the close of business on the expiration date for such subscription
rights set forth in the prospectus supplement. After the close time on the expiration date, all unexercised subscription rights
would become void.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Upon expiration of the rights
offering and the receipt of payment and the subscription rights certificate properly completed and duly executed at the corporate
trust office of the subscription rights agent or any other office indicated in the prospectus supplement we would issue, as soon
as practicable, the shares purchased as a result of such exercise. To the extent permissible under applicable law, we may determine
to offer any unsubscribed offered securities directly to persons other than stockholders, to or through agents, underwriters or
dealers or through a combination of such methods, as set forth in the applicable prospectus supplement.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>DIVIDENDS
AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Dividends
and Distributions</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
currently intends to distribute to stockholders, at least annually at such time so as to avoid imposition of excise taxes, substantially
all of its investment company taxable income (i.e. net investment income and any net short-term capital gains less expenses).
Net investment income for this purpose is income other than realized net capital gain (i.e. the extent of net long-term capital
gains over net short-term capital losses).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
current policy is to comply with the provisions of the Code that are applicable to regulated investment companies and to distribute
all its taxable income to its stockholders. Under these provisions, the Fund is not subject to federal income tax on its taxable
income and no federal tax provision is required.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><U>Dividend
Reinvestment Plan</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Registered
stockholders of shares of common stock of the Fund will automatically be enrolled (&ldquo;Participants&rdquo;) in the Fund&rsquo;s
Dividend Reinvestment Plan (the &ldquo;Plan&rdquo;). The terms and conditions of the Plan are as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">1.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">State
                                         Street Bank and Trust (the &ldquo;Agent&rdquo;) will act as agent for each Participant.
                                         The Agent will open an account for each registered stockholder as a Participant under
                                         the Plan in the same name in which such Participant&rsquo;s shares of common stock are
                                         registered.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">2.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">CASH OPTION.
                                         Pursuant to the Fund&rsquo;s Plan, unless a holder of common stock otherwise elects,
                                         all dividend and capital gains distributions (&ldquo;Distributions&rdquo;) will be automatically
                                         reinvested by the Agent in additional common stock of the Fund. Stockholders who elect
                                         not to participate in the Plan will receive all distributions in cash paid by check mailed
                                         directly to the stockholder of record (or, if the shares are held in street or other
                                         nominee name then to such nominee) by the Agent, as dividend paying agent. Stockholders
                                         and Participants may elect not to participate in the Plan and to receive all distributions
                                         of dividends and capital gains in cash by sending written instructions to the Agent,
                                         as dividend paying agent, at the address set forth below.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">3.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">MARKET
                                         PREMIUM ISSUANCES. If on the payment date for a Distribution, the NAV per share of common
                                         stock is equal to or less than the market price per common stock plus estimated brokerage
                                         commissions, the Agent shall receive newly issued common stock (&ldquo;Additional Common
                                         Stock&rdquo;) from the Fund for each Participant&rsquo;s account. The number of Additional
                                         Common Stock to be credited shall be determined by dividing the dollar amount of the
                                         Distribution by the greater of (i) the NAV per share of common stock on the payment date,
                                         or (ii) 95% of the market price per share of common stock on the payment date.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">4.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">MARKET
                                         DISCOUNT PURCHASES. If the NAV per share of common stock exceeds the market price plus
                                         estimated brokerage commissions on the payment date for a Distribution, the Agent (or
                                         a broker-dealer selected by the Agent) shall endeavor to apply the amount of such Distribution
                                         on each Participant&rsquo;s common stock to purchase common stock on the open market.
                                         In the event of a market discount on the payment date, the Agent will have 30 days after
                                         the dividend payment date (the &ldquo;last purchase date&rdquo;) to invest the dividend
                                         amount in shares acquired in open-market purchases. The weighted average price (including
                                         brokerage commissions) of all common stock purchased by the Agent as Agent shall be the
                                         price per common stock allocable to each Participant. If, before the Agent has completed
                                         its purchases, the market price plus estimated brokerage commissions exceeds the NAV
                                         of the common stock as of the payment date, the purchase price paid by Agent may exceed
                                         the NAV of the common stock, resulting in the acquisition of fewer common stock than
                                         if such Distribution had been paid in common stock issued by the Fund. Because of the
                                         foregoing difficulty with respect to open-market purchases, the Plan provides that if
                                         the Plan Agent is unable to invest the full dividend amount in open-market purchases
                                         during the purchase period or if the market discount shifts to a market premium during
                                         the purchase period, the Plan Agent may cease making open-market purchases and may invest
                                         the uninvested portion of the dividend amount in newly issued common stock at the NAV
                                         per share of common stock at the close of business on the last purchase date. Participants
                                         should note that they will not be able to instruct the Agent to purchase common stock
                                         at a specific time or at a specific price. Open-market purchases may be made on any securities
                                         exchange where common stock are traded, in the over-the-counter market or in negotiated
                                         transactions, and may be on such terms as to price, delivery and otherwise as the Agent
                                         shall determine. Each Participant&rsquo;s uninvested funds held by the Agent will not
                                         bear interest. The Agent shall have no liability in connection with any inability to
                                         purchase common stock within the time provided, or with the timing of any purchases effected.
                                         The Agent shall have no responsibility for the value of common stock acquired. The Agent
                                         may commingle Participants&rsquo; funds to be used for open-market purchases of the Fund&rsquo;s
                                         shares and the price per share allocable to each Participant in connection with such
                                         purchases shall be the average price (including brokerage commissions and other related
                                         costs) of all Fund shares purchased by Agent. The rules and regulations of the SEC may
                                         require the Agent to limit the Agent&rsquo;s market purchases or temporarily cease making
                                         market purchases for Participants.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">5.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">The market
                                         price of common stock on a particular date shall be the last sales price on the securities
                                         exchange where the common stock are listed on that date (currently the NASDAQ Capital
                                         Market)(the &ldquo;Exchange&rdquo;), or, if there is no sale on the Exchange on that
                                         date, then the average between the closing bid and asked quotations on the Exchange on
                                         such date will be used. The NAV per share of common stock on, a particular date shall
                                         be the amount calculated on that date (or if not calculated on such date, the amount
                                         most recently calculated) by or on behalf of the Fund.</FONT></TD></TR></TABLE>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">6.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Whenever
                                         the Agent receives or purchases shares or fractional interests for a Participant&rsquo;s
                                         account, the Agent will send such Participant a notification of the transaction as soon
                                         as practicable. The Agent will hold such shares and fractional interests as such Participant&rsquo;s
                                         agent and may hold them in the Agent&rsquo;s name or the name of the Agent&rsquo;s nominee.
                                         The Agent will not send a Participant stock certificates for shares unless a Participants
                                         so requests in writing or unless a Participant&rsquo;s account is terminated as stated
                                         below. The Agent will vote any shares so held for a Participant in accordance with any
                                         proxy returned to the Fund by such Participant in respect of the shares of which such
                                         Participant is the record holder.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">7.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">There
                                         is presently no service charge for the Agent serving as Participants&rsquo; agent and
                                         maintaining Participants&rsquo; accounts. The Agent may, however, charge Participants
                                         for extra services performed at their request. The Plan may be amended in the future
                                         to impose a service charge. In acting as Participants&rsquo; agent under the Plan, the
                                         Agent shall be liable only for acts, omissions, losses, damages or expenses caused by
                                         the Agent&rsquo;s willful misconduct or gross negligence. In addition, the Agent shall
                                         not be liable for any taxes, assessments or governmental charges which may be levied
                                         or assessed on any basis whatsoever in connection with the administration of the Plan.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">8.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">The Agent
                                         may hold each Participant&rsquo;s common stock acquired pursuant to the Plan together
                                         with the common stock of other stockholders of the Fund acquired pursuant to the Plan
                                         in non-certificated form in the Agent&rsquo;s name or that of the Agent&rsquo;s nominee.
                                         Each Participant will be sent a confirmation by the Agent of each acquisition made for
                                         his or her account as soon as practicable, but in no event later than 60 days, after
                                         the date thereof. Upon a Participant&rsquo;s request, the Agent will deliver to the Participant,
                                         without charge, a certificate or certificates for the full common stock. Although each
                                         Participant may from time to time have an undivided fractional interest in a common share
                                         of the Fund, no certificates for a fractional share will be issued. Similarly, Participants
                                         may request to sell a portion of the common stock held by the Agent in their Plan accounts
                                         by calling the Agent, writing to the Agent, or completing and returning the transaction
                                         form attached to each Plan statement. The Agent will sell such common stock through a
                                         broker-dealer selected by the Agent within 5 business days of receipt of the request.
                                         The sale price will equal the weighted average price of all common stock sold through
                                         the Plan on the day of the sale, less brokerage commissions. Participants should note
                                         that the Agent is unable to accept instructions to sell on a specific date or at a specific
                                         price. Any share dividends or split shares distributed by the Fund on common stock held
                                         by the Agent for Participants will be credited to their accounts. In the event that the
                                         Fund makes available to its stockholders rights to purchase additional common stock,
                                         the common stock held for each Participant under the Plan will be added to other common
                                         stock held by the Participant in calculating the number of rights to be issued to each
                                         Participant.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 11pt">If
a Participant holds more than one common stock Certificate registered in similar but not identical names or if more than one address
is shown for a Participant on the Fund&rsquo;s records, all of such Participant&rsquo;s shares of common stock must be put into
the same name and address if all of them are to be covered by one account. Additional shares subsequently acquired by a Participant
otherwise than through the Plan will be covered by the Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">9.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">The reinvestment
                                         of Distributions does not relieve Participants of any federal, state or local taxes which
                                         may be payable (or required to be withheld on Distributions.) Participants will receive
                                         tax information annually for their personal records and to help them prepare their federal
                                         income tax return. For further information as to tax consequences of participation in
                                         the Plan, Participants should consult with their own tax advisors.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">10.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Each
                                         registered Participant may terminate his or her account under the Plan by notifying the
                                         Agent in writing at State Street Bank and Trust, 200 Clarendon Street 16th Floor, Boston,
                                         MA 02116, or by calling the Agent at (617) 662-2760. Such termination will be effective
                                         with respect to a particular Distribution if the Participant&rsquo;s notice is received
                                         by the Agent prior to such Distribution Record Date. The Plan may be terminated by the
                                         Agent or the Fund upon notice in writing mailed to each Participant at least 60 days
                                         prior to the effective date of the termination. Upon any termination, the Agent will
                                         cause a certificate or certificates to be issued for the full shares held for each Participant
                                         under the Plan and cash adjustment for any fraction of a common share at the then current
                                         market value of the common shares to be delivered to him. If preferred, a Participant
                                         may request the sale of all of the common shares held by the Agent in his or her Plan
                                         account in order to terminate participation in the Plan. If any Participant elects in
                                         advance of such termination to have Agent sell part or all of his or her shares, Agent
                                         is authorized to deduct from the proceeds the brokerage commissions incurred for the
                                         transaction. If a Participant has terminated his or her participation in the Plan but
                                         continues to have common shares registered in his or her name, he or she may re-enroll
                                         in the Plan at any time by notifying the Agent in writing at the address above.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">11.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">These
                                         terms and conditions may be amended by the Agent or the Fund at any time but, except
                                         when necessary or appropriate to comply with applicable law or the rules or policies
                                         of the SEC or any other regulatory authority, only by mailing to each Participant appropriate
                                         written notice at least 30 days prior to the effective date thereof. The amendment shall
                                         be deemed to be accepted by each Participant unless, prior to the effective date thereof,
                                         the Agent receives notice of the termination of the Participant&rsquo;s account under
                                         the Plan. Any such amendment may include an appointment by the Agent of a successor Agent,
                                         subject to the prior written approval of the successor Agent by the Fund.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>







<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-size: 11pt">12.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">These
                                         terms and conditions shall be governed by the laws of the State of Maryland.</FONT></TD></TR></TABLE>



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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-size: 11pt">PLAN
OF DISTRIBUTION</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We may offer,
from time to time, in one or more offerings or series, up to $88 million of our common stock, par value $0.001 per share, or subscription
rights in one or more underwritten public offerings, at-the-market offerings, negotiated transactions, block trades, best efforts
or a combination of these methods. Any underwriter or agent involved in the offer and sale of the securities will be named in
the applicable prospectus supplement. A prospectus supplement or supplements will also describe the terms of the offering of the
securities, including: the purchase price of the securities and the proceeds, if any, we will receive from the sale; any over-allotment
options under which underwriters may purchase additional securities from us; any agency fees or underwriting discounts and other
items constituting agents&rsquo; or underwriters&rsquo; compensation; the public offering price; any discounts or concessions
allowed or re-allowed or paid to dealers; and any securities exchange or market on which the securities may be listed. Only underwriters
named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The distribution
of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed,
at prevailing market prices at the time of sale, at prices related to such prevailing market prices, or at negotiated prices;
provided, however, in the event we offer common stock, the offering price per share of our common stock exclusive of any underwriting
commissions or discounts will not be less than the NAV per share of our common stock at the time we make the offering except (1)
in connection with a subscription rights offering to our existing stockholders, (2) with the consent of the majority of our common
stockholders and approval of our board of directors, or the board, or (3) under such circumstances as the SEC may permit. The
price at which securities may be distributed may represent a discount from prevailing market prices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In connection
with the sale of the securities, underwriters or agents may receive compensation from us or from purchasers of the securities,
for whom they may act as agents, in the form of discounts, concessions or commissions. Our common stockholders will indirectly
bear such fees and expenses as well as any other fees and expenses incurred by us in connection with any sale of securities. Underwriters
may sell the securities to or through dealers and such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers
and agents that participate in the distribution of the securities may be deemed to be underwriters under the Securities Act, and
any discounts and commissions they receive from us and any profit realized by them on the resale of the securities may be deemed
to be underwriting discounts and commissions under the Securities Act. Any such underwriter or agent will be identified and any
such compensation received from us will be described in the applicable prospectus supplement. The maximum aggregate commission
or discount to be received by any member of FINRA or independent broker-dealer will not be greater than 8% of the gross proceeds
of the sale of securities offered pursuant to this prospectus and any applicable prospectus supplement. We may also reimburse
the underwriter or agent for certain fees and legal expenses incurred by it.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Any underwriter
may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation
M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum
price. Syndicate-covering or other short-covering transactions involve purchases of the securities, either through exercise of
the over-allotment option or in the open market after the distribution is completed, to cover short positions. Penalty bids permit
the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased
in a stabilizing or covering transaction to cover short positions. Those activities may cause the price of the securities to be
higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We may sell
securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale
of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement
states otherwise, our agent will act on a best-efforts basis for the period of its appointment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Unless otherwise
specified in the applicable prospectus supplement, each issuance of common stock will be listed on the NASDAQ Capital Market.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Under agreements
that we may enter, underwriters, dealers and agents who participate in the distribution of shares of our securities may be entitled
to indemnification by us against certain liabilities, including liabilities under the Securities Act, or contribution with respect
to payments that the agents or underwriters may make with respect to these liabilities. Underwriters, dealers and agents may engage
in transactions with, or perform services for, us in the ordinary course of business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">If so indicated
in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers
by certain institutions to purchase our securities from us pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved
by us. The obligations of any purchaser under any such contract will be subject to the condition that the purchase of our securities
shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject. The underwriters
and such other agents will not have any responsibility in respect of the validity or performance of such contracts. Such contracts
will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth
the commission payable for solicitation of such contracts.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We may enter
into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties
may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions.
If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any
related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any
related open borrowings of stock. The third parties in such sale transactions will be underwriters and, if not identified in this
prospectus, will be identified in the applicable prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In order
to comply with the securities laws of certain states, if applicable, our securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>TAXATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The following
summary reflects the existing provisions of the U.S. Internal Revenue Code of 1986, as amended (the &ldquo;Code&rdquo;) and other
relevant federal income tax authorities as of the date of this prospectus and is subject to any subsequent changes therein. The
federal income tax consequences described below are merely statements of general tax principles. The following discussion summarizes
certain U.S. federal income tax considerations affecting the Fund and its U.S. stockholders. This discussion is for general information
only and does not purport to consider all aspects of U.S. federal income taxation that might be relevant to owners of common stock
or subscription rights. Therefore, the summary discussion that follows may not be considered to be individual tax advice and may
not be relied upon by any owner of common stock or subscription rights. The summary is based upon current provisions of the Code,
applicable U.S. Treasury Regulations promulgated thereunder (the &ldquo;Regulations&rdquo;), and administrative and judicial interpretations
thereof, all of which are subject to change, which change could be retroactive, and may affect the conclusions expressed herein.
The summary applies only to U.S. stockholders in whose hands subscription rights and common stock are capital assets within the
meaning of Section 1221 of the Code, and may not apply to certain types of owners of common stock or subscription rights in the
Fund, including, but not limited to insurance companies, tax-exempt organizations, U.S. stockholders holding the Fund&rsquo;s
shares through tax-advantaged accounts (such as an individual retirement account (an &ldquo;IRA&rdquo;), a 401(k) plan account,
or other qualified retirement account), financial institutions, pass-through entities, broker-dealers, non-U.S. stockholders,
U.S. stockholders holding subscription rights or common stock as part of a hedge, straddle or conversion transaction, and U.S.
stockholders who are subject to the alternative minimum tax. Persons who may be subject to tax in more than one country should
consult the provisions of any applicable tax treaty to determine the potential tax consequences to them.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">A &ldquo;U.S.
stockholder&rdquo; is for U.S. federal income tax purposes generally: (i) a citizen or individual resident of the United States;
(ii) a corporation or other entity treated as a corporation, created or organized in or under the laws of the United States or
any political subdivision thereof; (iii) a trust if a court within the United States is asked to exercise primary supervision
over the administration of the trust and one or more United States persons have the authority to control all substantive decisions
of the trust (or a trust which has made a valid election to be treated as a U.S. trust); or (iv) an estate, the income of which
is subject to U.S. federal income taxation regardless of its source. A &ldquo;non-U.S. stockholder&rdquo; generally is any person
or entity that is not a U.S. stockholder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">If a partnership
(including an entity treated as a partnership for U.S. federal income tax purposes) holds shares of the Fund&rsquo;s common stock,
the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the
partnership. A prospective stockholder that is a partner of a partnership holding shares of the Fund&rsquo;s common stock should
consult his, her or its tax advisers with respect to the purchase, ownership and disposition of shares of the Fund&rsquo;s common
stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
has not requested and will not request an advance ruling from the Internal Revenue Service (the &ldquo;IRS&rdquo;) as to the federal
income tax matters described below. The IRS could adopt positions contrary to those discussed below and such positions could be
sustained. In addition, the following discussion applicable to U.S. stockholders of the Fund addresses only some of the federal
income tax considerations generally affecting investments in the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">On December
22, 2017, new tax legislation was enacted which includes significant changes in tax rates, restrictions on miscellaneous itemized
deductions, changes to the dividends received deduction, restrictions on the deduction of interest and the international operations
of domestic businesses. Certain changes have sunset provisions, which are important to note. Because the tax legislation is recently
enacted and Treasury Regulations related to such legislation have not been drafted, there is still uncertainty in how the legislation
will affect the Fund&rsquo;s investments and shareholders and whether such legislation could have an adverse effect on the Fund&rsquo;s
investments or the taxation of the shareholders of the Fund. <B>Shareholders are urged and advised to consult their own tax advisor
with respect to the impact of this legislation. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">IN VIEW
OF THE INDIVIDUAL NATURE OF TAX CONSEQUENCES TO A STOCKHOLDER, EACH STOCKHOLDER IS ADVISED TO CONSULT THE STOCKHOLDER&rsquo;S
OWN TAX ADVISER WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF BEING A STOCKHOLDER OF THE FUND, INCLUDING THE EFFECT AND APPLICABILITY
OF FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES THEREIN.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Federal
Taxation of the Fund and its Distributions </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
has elected and intends to continue to qualify annually to be treated as a regulated investment company under the Code. To qualify
as a regulated investment company, the Fund must, among other things: (a) derive at least 90% of its gross income for each taxable
year from (i) dividends, interest, payments with respect to securities loans and gains from the sale or other disposition of stock,
securities or foreign currencies, or other income (including but not limited to gains from options, futures and forward contracts)
derived with respect to its business of investing in such stock, securities or currencies, and (ii) net income from certain qualified
publicly traded partnerships (together with (i), the &ldquo;Qualifying Income Requirement&rdquo;); and (b) diversify its holdings
so that, at the close of each quarter of the taxable year: (i) at least 50% of the value of its assets is comprised of cash, cash
items (including receivables), U.S. government securities, securities of other regulated investment companies and other securities,
with those other securities limited, in respect of any one issuer, to an amount that does not exceed 5% of the value of its total
assets and that does not represent more than 10% of the outstanding voting securities of such issuer; and (ii) not more than 25%
of the value of its assets is invested in the securities (other than U.S. government securities or securities of other regulated
investment companies) of any one issuer or the securities (other than the securities of other regulated investment companies)
of two or more issuers controlled by it and engaged in the same, similar or related trades or businesses, or one or more &ldquo;qualified
publicly traded partnerships&rdquo; (together with (i), the &ldquo;Diversification Requirement&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Treasury
Department is authorized to promulgate regulations under which gains from foreign currencies (and options, futures, and forward
contracts on foreign currency) would constitute qualifying income for purposes of the Qualifying Income Requirement only if such
gains are directly related to the principal business of the Fund in investing in stock or securities or options and futures with
respect to stock or securities. To date, no such regulations have been issued.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">As a regulated
investment company, the Fund (but not its stockholders) generally will not be subject to U.S. federal income tax on the portion
of its income and capital gains that it distributes to its stockholders in any taxable year for which it distributes, in compliance
with the Code&rsquo;s timing and other requirements the sum of (i) at least 90% of its investment company taxable income (which
includes dividends, taxable interest, taxable original issue discount income, market discount income, income from securities lending,
net short-term capital gain in excess of net long-term capital loss, certain net realized foreign currency exchange gains, and
any other taxable income other than &ldquo;net capital gain&rdquo; as defined below and is reduced by deductible expenses all
determined without regard to any deduction for dividends paid); and (ii) 90% of its tax-exempt interest, if any, net of certain
expenses allocable thereto (&ldquo;net tax-exempt interest&rdquo;). The Fund may retain for investment all or a portion of its
&ldquo;net capital gain&rdquo; (i.e., the excess of its net long-term capital gain over its net short-term capital loss). If the
Fund retains any investment company taxable income or net capital gain, it will be subject to tax at regular corporate rates on
the amount retained. The Fund currently intends to distribute to its stockholders, at least annually, substantially all of its
investment company taxable income, as computed for U.S. federal income tax purposes. If the Fund retains any net capital gain,
it may designate the retained amount as undistributed net capital gain in a notice to its stockholders, who will be (i) required
to include in income for federal income tax purposes, as long-term capital gain, their shares of such undistributed amount; and
(ii) entitled to credit their proportionate shares of tax paid by the Fund against their federal income tax liabilities, if any,
and to claim refunds to the extent the credit exceeds such liabilities. For federal income tax purposes, the tax basis of the
shares owned by a stockholder of the Fund will be increased by the amount of undistributed net capital gain included in the stockholder&rsquo;s
gross income and decreased by the federal income tax paid by the Fund on that amount of capital gain.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In general,
for purposes of the Qualifying Income Requirement described above, income derived from a partnership will be treated as qualifying
income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if
realized directly by the regulated investment company. However, all of the net income of a regulated investment company derived
from an interest in a qualified publicly traded partnership (defined as a partnership (x) the interests in which are traded on
an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof, and (y)
that derives less than 90% of its income from the qualifying income described in clause (i) of the Qualifying Income Requirement
described above) will be treated as qualifying income. In general, such entities will be treated as partnerships for federal income
tax purposes if they meet the passive income requirement under Section 7704(c)(2) of the Code. In addition, although in general
the passive loss rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment
company with respect to items attributable to an interest in a qualified publicly traded partnership. For purposes of the Diversification
Requirement described above, the term &ldquo;outstanding voting securities of such issuer&rdquo; will include the equity securities
of a qualified publicly traded partnership. Under recent legislation the transferee of a partnership interest generally is required
to withhold 10% of the amount realized on the sale or exchange of a partnership interest after December 31, 2017, unless the transferor
certifies it is not a foreign person. However, the IRS has delayed this withholding requirement with respect to publicly traded
partnerships. It is unclear when and how this withholding requirement will go into effect.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">If the Fund
fails to satisfy the Qualifying Income Requirement or the Diversification Requirement in any taxable year, it may be eligible
for relief provisions if the failures are due to reasonable cause and not willful neglect and if a penalty tax is paid with respect
to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain de minimis failures to satisfy
the Diversification Requirements where the Fund corrects the failure within a specified period of time. If the applicable relief
provisions are not available or cannot be met, the Fund will fail to qualify as a regulated investment company and will be subject
to tax in the same manner as an ordinary corporation subject to tax at a flat rate of 21% and all distributions from earnings
and profits (as determined under U.S. federal income tax principles) to its stockholders will be taxable as ordinary dividend
income eligible for the dividends-received deduction for corporate stockholders and taxable at the long-term capital gains tax
rate taxable on a graduated basis with a maximum tax rate of 20% for non-corporate U.S. stockholders. In addition, certain U.S.
stockholders will be subject to a 3.8% tax with respect to their net investment income, which includes capital gains and dividends.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">If the Fund
fails to distribute by December 31 of each calendar year an amount equal to the sum of (1) at least 98% of its taxable ordinary
income (excluding capital gains and losses) for such year, (2) at least 98.2% of the excess of its capital gains over its capital
losses (as adjusted for certain ordinary losses) for the twelve month period ending on October 31 of such year), and (3) all taxable
ordinary income and the excess of capital gains over capital losses for the prior year that were not distributed during such year
and on which it did not pay federal income tax, the Fund will be subject to a nondeductible 4% excise tax (the &ldquo;Excise Tax&rdquo;)
on the undistributed amounts. A distribution will be treated as paid on December 31 of the calendar year if it is declared by
the Fund in October, November, or December of that year to stockholders of record on a date in such month and paid by it during
January of the following year. Such distributions will be taxable to stockholders (other than those not subject to federal income
tax) in the calendar year in which the distributions are declared, rather than the calendar year in which the distributions are
received. The Fund intends to actually distribute or be deemed to have distributed substantially all of its net income and gain,
if any, by the end of each calendar year in compliance with these requirements so that it will generally not be required to pay
the Excise Tax. The Fund may, in certain circumstances, be required to liquidate its investments in order to make sufficient distributions
to avoid Excise Tax liability at a time when an investment adviser might not otherwise have chosen to do so. Liquidation of investments
in such circumstances may affect the ability of the Fund to satisfy the requirements for qualification as a regulated investment
company. Moreover, if the Fund utilizes leverage through borrowings, it may be restricted by loan covenants with respect to the
declaration and payment of dividends in certain circumstances. Limits on the Fund&rsquo;s payment of dividends may prevent the
Fund from distributing at least 90% of its net income and may therefore jeopardize the Fund&rsquo;s qualification for taxation
as a regulated investment company and/or may subject the Fund to the nondeductible 4% federal excise tax. The Fund will endeavor
to avoid restrictions on its ability to make dividend payments. However, no assurances can be given that the Fund will not be
subject to the Excise Tax and, in fact, in certain instances if warranted, the Fund may choose to pay the Excise Tax as opposed
to making an additional distribution.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">For losses
arising from tax years beginning before December 22, 2010, the Fund is permitted to carry forward a net capital loss from any
year to offset its capital gains, if any, realized during the eight years following the year of the loss and such capital loss
carryforward is treated as a short-term capital loss in the year to which it is carried. For capital losses realized with respect
to tax years of the Fund beginning after December 22, 2010, such Fund may carry capital losses forward indefinitely. For capital
losses realized in taxable years beginning after December 22, 2010, the excess of the Fund&rsquo;s net short-term capital losses
over its net long-term capital gain is treated as short-term capital losses arising on the first day of the Fund&rsquo;s next
taxable year and the excess of the Fund&rsquo;s net long-term capital losses over its net short-term capital gain is treated as
long-term capital losses arising on the first day of the Fund&rsquo;s net taxable year. If future capital gains are offset by
carried forward capital losses, such future capital gains are not subject to Fund-level federal income taxation, regardless of
whether they are distributed to stockholders. The Fund cannot carry back or carry forward any net operating losses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Gain or
loss on the sales of securities by the Fund will generally be long-term capital gain or loss if the securities have been held
by the Fund for more than one year. Gain or loss on the sale of securities held for one year or less will be short-term capital
gain or loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
investment in so-called &ldquo;Section 1256 contracts,&rdquo; such as regulated futures contracts, certain foreign currency contracts,
options on most stock indices and any listed non-equity options, are subject to special tax rules. Any such Section 1256 contracts
held by the Fund at the end of its taxable year are required to be marked to their market value, and any unrealized gain or loss
on those positions will be included in the Fund&rsquo;s income as if each position had been sold for its fair market value at
the end of the taxable year. The resulting gain or loss will be combined with any gain or loss realized by the Fund from positions
in Section 1256 contracts closed during the taxable year. Provided such positions are held as capital assets and are not part
of a &ldquo;hedging transaction&rdquo; nor part of a &ldquo;straddle,&rdquo; 60% of the resulting net gain or loss will be treated
as long-term capital gain or loss, and 40% of such net gain or loss will be treated as short-term capital gain or loss, regardless
of the period of time the positions were actually held by the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Certain
of the Fund&rsquo;s investment practices are subject to special and complex U.S. federal income tax provisions that may, among
other things, (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions, including the dividends
received deduction, (ii) convert lower taxed long-term capital gains and qualified dividend income into higher taxed short-term
capital gains or ordinary income, (iii) convert ordinary loss or a deduction into capital loss (the deductibility of which is
more limited), (iv) cause the Fund to recognize income or gain without a corresponding receipt of cash making it difficult to
satisfy the investment income distribution requirements, (v) adversely affect the time as to when a purchase or sale of stock
or securities is deemed to occur, (vi) adversely alter the characterization of certain complex financial transactions and (vii)
produce income that will not qualify as good income for purposes of the Qualifying Income Requirement described above. The Fund
monitors its transactions and may make certain tax elections and may be required to borrow money or dispose of securities to mitigate
the effect of these rules and prevent disqualification of the Fund as a regulated investment company.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Income received
by the Fund from sources within foreign countries may be subject to foreign withholding and other taxes. Tax conventions between
certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the Fund&rsquo;s total assets
at the close of any taxable year consist of stock or securities of foreign corporations and it meets the distribution requirements
described above, the Fund may file an election (the &ldquo;pass-through election&rdquo;) with the IRS pursuant to which stockholders
of it would be required to (i) include in gross income (in addition to taxable dividends actually received) their pro rata shares
of foreign income taxes paid by it even though not actually received by such stockholders; and (ii) treat such respective pro
rata portions as foreign income taxes paid by them. The Fund will furnish its stockholders with a written statement providing
the amount of foreign taxes paid by it that will &ldquo;pass-through&rdquo; for the year, if any. Generally, a credit for foreign
taxes is subject to the limitation that it may not exceed the stockholder&rsquo;s U.S. tax attributable to his or her total foreign
source taxable income. For this purpose, if the pass-through election is made, the source of the Fund&rsquo;s income will flow
through to stockholders. The limitation on the foreign tax credit is applied separately to foreign source passive income, and
to certain other types of income. Stockholders may be unable to claim a credit for the full amount of their proportionate share
of the foreign taxes paid by the Fund. Various limitations, including a minimum holding period requirement, apply to limit the
credit and deduction for foreign taxes for purposes of regular federal tax and alternative minimum tax. In addition, a stockholder
of the Fund may not be able to use foreign tax credits passed through by the Fund if the Fund&rsquo;s shares are loaned pursuant
to a securities lending agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may invest in a non-U.S. corporation, which could be treated as a passive foreign investment company (a &ldquo;PFIC&rdquo;) or
become a PFIC under the Code. A PFIC is generally defined as a foreign corporation that meets either of the following tests: (1)
at least 75% of its gross income for its taxable year is income from passive sources (such as interest, dividends, certain rents
and royalties, or capital gains); or (2) an average of at least 50% of its assets produce, or are held for the production of,
such passive income. If the Fund acquires any equity interest in a PFIC, the Fund could be subject to federal income tax and interest
charges on &ldquo;excess distributions&rdquo; received with respect to such PFIC stock or on any gain from the sale of such PFIC
stock (collectively &ldquo;PFIC income&rdquo;), plus interest thereon even if the Fund distributes the PFIC income as a taxable
dividend to its stockholders. The balance of the PFIC income will be included in the Fund&rsquo;s investment company taxable income
and, accordingly, will not be taxable to it to the extent it distributes that income to its stockholders. The Fund&rsquo;s distributions
of PFIC income, if any, will be taxable as ordinary income even though, absent the application of the PFIC rules, some portion
of the distributions may have been classified as capital gain.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
will not be permitted to pass through to its stockholders any credit or deduction for taxes and interest charges incurred with
respect to a PFIC. Payment of this tax would therefore reduce the Fund&rsquo;s economic return from its investment in PFIC shares.
To the extent the Fund invests in a PFIC, it may elect to treat the PFIC as a &ldquo;qualified electing fund&rdquo; (&ldquo;QEF&rdquo;),
then instead of the tax and interest obligation described above on excess distributions, the Fund would be required to include
in income each taxable year its pro rata share of the QEF&rsquo;s annual ordinary earnings and net capital gain. As a result of
a QEF election, the Fund would likely have to distribute to its stockholders an amount equal to the QEF&rsquo;s annual ordinary
earnings and net capital gain to satisfy the Code&rsquo;s minimum distribution requirement described herein and avoid imposition
of the Excise Tax even if the QEF did not distribute those earnings and gain to the Fund. In most instances it will be very difficult,
if not impossible, to make this election because of certain requirements in making the election. The Fund may elect to &ldquo;mark-to-market&rdquo;
its stock in any PFIC. &ldquo;Marking-to-market,&rdquo; in this context, means including in ordinary income each taxable year
the excess, if any, of the fair market value of the PFIC stock over the Fund&rsquo;s adjusted basis therein as of the end of that
year. Pursuant to the election, the Fund also may deduct (as an ordinary, not capital, loss) the excess, if any, of its adjusted
basis in the PFIC stock over the fair market value thereof as of the taxable year-end, but only to the extent of any net mark-to-market
gains with respect to that stock it included in income for prior taxable years under the election. The Fund&rsquo;s adjusted basis
in its PFIC stock subject to the election would be adjusted to reflect the amounts of income included and deductions taken thereunder.
In either case, the Fund may be required to recognize taxable income or gain without the concurrent receipt of cash.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Gains or
losses attributable to fluctuations in exchange rates between the time the Fund accrues income or receivables or expenses or other
liabilities denominated in a foreign currency and the time the Fund actually collects such income or receivables or pays such
liabilities are generally treated as ordinary income or loss. Foreign currency gains and losses realized by the Fund in connection
with certain transactions involving foreign currency-denominated debt instruments, certain options, futures contracts, forward
contracts, and similar instruments relating to foreign currency, foreign currencies, and foreign currency-denominated payables
and receivables are subject to Section&nbsp;988 of the IRC, which causes such gains and losses to be treated as ordinary income
or loss and may affect the amount and timing of recognition of the Fund&rsquo;s income. In some cases elections may be available
that would alter this treatment, but such elections could be detrimental to the Fund by creating current recognition of income
without the concurrent recognition of cash. If a foreign currency loss treated as an ordinary loss under Section&nbsp;988 were
to exceed the Fund&rsquo;s investment company taxable income (computed without regard to such loss) for a taxable year the resulting
loss would not be deductible by it or its shareholders in future years. The foreign currency income or loss will also increase
or decrease the Fund&rsquo;s investment company income distributable to its shareholders.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Distributions
paid out of the Fund&rsquo;s current and accumulated earnings and profits (as determined at the end of the year), whether reinvested
in additional shares or paid in cash, are generally taxable and must be reported by each stockholder who is required to file a
federal income tax return. Distributions in excess of the Fund&rsquo;s current and accumulated earnings and profits, as computed
for federal income tax purposes, will first be treated as a return of capital up to the amount of a stockholder&rsquo;s tax basis
in his or her Fund shares and then as capital gain.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">For federal
income tax purposes, distributions of investment company taxable income are generally taxable as ordinary income, and distributions
of gains from the sale of investments that the Fund owned for one year or less will be taxable as ordinary income. Distributions
designated by the Fund as &ldquo;capital gain dividends&rdquo; (distributions from the excess of net long-term capital gain over
short-term capital losses) will be taxable to stockholders as long-term capital gain regardless of the length of time they have
held their shares of the Fund. Such dividends do not qualify as dividends for purposes of the dividends received deduction described
below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Non-corporate
stockholders of the Fund may be eligible for the long-term capital gain tax rate applicable to distributions of &ldquo;qualified
dividend income&rdquo; received by such non-corporate stockholders. The Fund&rsquo;s distribution will be treated as qualified
dividend income and therefore eligible for the long-term capital gains tax rate to the extent that it receives dividend income
from taxable domestic corporations and certain qualified foreign corporations, provided that certain holding periods and other
requirements are met. For example, if the Fund&rsquo;s shares are loaned pursuant to a securities lending arrangement, dividends
paid while the shares are held by the borrower may not be qualified dividend income and may not qualify for the dividends received
deduction. Currently, the maximum long-term capital gain tax rate for individual U.S. stockholders is 20%. Corporate stockholders
of the Fund will be subject to tax on distributions of qualified dividend income at a flat rate of 21%. Generally, corporate stockholders
will not be eligible for the dividends received deduction because the Fund&rsquo;s income will not consist of qualified dividend
income.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Under current
law, a 3.8% Medicare contribution tax on net investment income including interest (excluding, tax-exempt interest), dividends,
and capital gains of U.S. individuals with income exceeding $200,000 ($250,000 if married and filing jointly) and of estates and
trusts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
will furnish a statement to stockholders providing the federal income tax status of its dividends and distributions including
the portion of such dividends, if any, that qualifies as long-term capital gain.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Different
tax treatment, including penalties on certain excess contributions and deferrals, certain pre-retirement and post-retirement distributions,
and certain prohibited transactions, is accorded to accounts maintained as qualified retirement plans. Stockholders are urged
and advised to consult their own tax advisers for more information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
may retain for investment its net capital gain. However, if the Fund retains any net capital gain or any investment company taxable
income, it will be subject to a tax of 21% of such amount. If the Fund retains any net capital gain, it expects to designate the
retained amount as undistributed capital gains in a notice to its stockholders, each of whom, if subject to U.S. federal income
tax on long-term capital gains, (i) will be required to include in income for U.S. federal income tax purposes its share of such
undistributed long-term capital gain, (ii) will be entitled to credit its proportionate share of the tax paid by the Fund against
their U.S. federal income tax liability, if any, and to claim refunds to the extent that the credit exceeds such liability and
(iii) will increase its tax basis in its common shares for the Fund by an amount equal to 79% of the amount of undistributed capital
gain included in such stockholder&rsquo;s gross income.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
income will be increased or decreased by the amount of foreign currency gains or losses realized by the Fund in connection with
the disposition of foreign currency-denominated debt securities as well as changes in foreign exchange rates between the time
the Fund accrues a receivable (typically, dividends, interest and payments for securities sold) or payable (typically, expenses
and payments for securities purchased) and the time such receivable or payable is satisfied. The Fund cannot predict the impact
of such transactions on its investment company taxable income distributable to stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Upon the
disposition of shares of the Fund (whether by redemption, sale or exchange), a stockholder may realize a capital gain or loss.
Such capital gain or loss will be long-term or short-term depending upon the stockholder&rsquo;s holding period for the shares.
The capital gain will be long-term if the shares were held for more than 12 months and short-term if held for 12 months or less.
Currently, for individual U.S. stockholders, the maximum long-term capital gain tax rate is 20% and the maximum short-term capital
gain tax rate is 37%. In addition, certain U.S. stockholders will be subject to a 3.8% tax with respect to their net investment
income, which includes capital gains and dividends from selling, exchanging, or holding shares of the Fund. Corporate U.S. stockholders
are taxed at a flat rate of 21% on long-term and short-term capital gains.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">If a stockholder
sells or exchanges shares of the Fund within 90 days of having acquired such shares and if, before January 31 of the calendar
year following the calendar year of the sale or exchange, as a result of having initially acquired those shares, the stockholder
subsequently pays a reduced sales charge on a new purchase of shares of the Fund, the sales charge previously incurred in acquiring
the Fund&rsquo;s shares generally shall not be taken into account (to the extent the previous sales charges do not exceed the
reduction in sales charges on the new purchase) for the purpose of determining the amount of gain or loss on the disposition,
but generally will be treated as having been incurred in the new purchase. Any loss realized on a disposition will be disallowed
under the &ldquo;wash sale&rdquo; rules to the extent that the shares disposed of by the stockholder are replaced by the stockholder
within a period of 61 days beginning 30 days before and ending 30 days after the date of disposition. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss. Any loss realized by a stockholder on a disposition of
shares held by the stockholder for six months or less will be treated as a long-term capital loss to the extent of any distributions
of capital gain dividends received by the stockholder and disallowed to the extent of any distributions of tax-exempt interest
dividends received by the stockholder with respect to such shares. Capital losses are generally deductible only against capital
gains except that individuals may deduct up to $3,000 of capital losses against ordinary income.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
generally is required to withhold, and remit to the U.S. Treasury, subject to certain exemptions, an amount equal to 24% of all
distributions and redemption proceeds paid or credited to a stockholder of the Fund if (i) the stockholder fails to furnish the
Fund with the correct taxpayer identification number (&ldquo;TIN&rdquo;) certified under penalties of perjury, (ii) the stockholder
fails to provide a certified statement that the stockholder is not subject to backup withholding, or (iii) the IRS or a broker
has notified the Fund that the number furnished by the stockholder is incorrect or that the stockholder is subject to backup withholding
as a result of failure to report interest or dividend income. If the backup withholding provisions are applicable, any such distributions
or proceeds, whether taken in cash or reinvested in shares, will be reduced by the amounts required to be withheld. Backup withholding
is not an additional tax. Any amounts withheld may be credited against a stockholder&rsquo;s U.S. federal income tax liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">A tax-exempt
stockholder could realize unrelated business taxable income (&ldquo;UBTI&rdquo;) by virtue of its investment in the Fund as a
result of the Fund&rsquo;s investments and if shares in the Fund constitute debt financed property in the hands of the tax-exempt
stockholder within the meaning of Section 514(b) of the Code. In addition, special tax consequences apply to charitable remainder
trusts (CRTs) that invest in regulated investment companies that invest directly or indirectly in certain real estate mortgage
investments. Tax-exempt stockholders are urged and advised to consult their own tax advisers as to the tax consequences of an
investment in the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">State and
local laws often differ from federal income tax laws with respect to the treatment of specific items of income, gain, loss, deduction
and credit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Distributions
made to non-U.S. stockholders attributable to net investment income generally are subject to U.S. federal income tax withholding
at a 30% rate (or such lower rate provided under an applicable income tax treaty). Notwithstanding the foregoing, if a distribution
described above is effectively connected with the conduct of a trade or business carried on by a non-U.S. stockholder within the
United States (or, if an income tax treaty applies, is attributable to a permanent establishment in the United States), federal
income tax withholding and exemptions attributable to foreign persons will not apply. Instead, the distribution will be subject
to withholding at the highest applicable U.S. tax rate (currently 37% in the case of individuals and 21% in the case of corporations)
and the non-U.S. stockholder will be subject to federal income tax reporting requirements generally applicable to U.S. persons
described above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Under U.S.
federal tax law, a non-U.S. stockholder is not, in general, subject to federal income tax or withholding tax on capital gains
(and is not allowed a deduction for losses) realized on the sale of shares of the Fund and on long-term capital gains dividends,
provided that the Fund obtains a properly completed and signed certificate of foreign status, unless (i) such gains or distributions
are effectively connected with the conduct of a trade or business carried on by the non-U.S. stockholder within the United States
(or, if an income tax treaty applies, are attributable to a permanent establishment in the United States of the non-U.S. stockholder);
(ii) in the case of an individual non-U.S. stockholder, the stockholder is present in the United States for a period or periods
aggregating 183 days or more during the year of the sale and certain other conditions are met; or (iii) the shares of the Fund
constitute U.S. real property interests (USRPIs), as described below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Under current
law, if the Fund is considered to be a &ldquo;United States Real Property Holding Corporation&rdquo; (as defined in the IRC and
Treasury Regulations), then distributions attributable to certain underlying real estate investment trust (&ldquo;REIT&rdquo;)
investments and redemption proceeds paid to a non-U.S. stockholder that owns at least 5% of the Fund, generally, will (i) cause
the non-U.S. stockholder to treat such gain or distribution as income effectively connected with a trade or business in the United
States, (ii) subject such gain or distribution to withholding tax and (iii) cause the non-U.S. stockholder to be required to file
a federal income tax return. In addition, in any year when at least 50% of the Fund&rsquo;s assets are USRPIs (as defined in the
IRC and Treasury Regulations), distributions of the Fund that are attributable to gains from the sale or exchange of stock in
USRPIs may be subject to U.S. withholding tax (regardless of such stockholder&rsquo;s percentage interest in the Fund) and may
require the non-U.S. stockholder to file a U.S. federal income tax return in order to receive a refund (if any) of the withheld
amount.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Subject
to the additional rules described herein, federal income tax withholding will apply to distributions attributable to dividends
and other investment income distributed by the Fund. The federal income tax withholding rate may be reduced (and, in some cases,
eliminated) under an applicable tax treaty between the United States and the non-U.S. stockholder&rsquo;s country of residence
or incorporation. In order to qualify for treaty benefits, a non-U.S. stockholder must comply with applicable certification requirements
relating to its foreign status (generally by providing a Fund with a properly completed Form W-8BEN).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Pursuant
to the Foreign Account Tax Compliance Act (&ldquo;FATCA&rdquo;), a 30% withholding tax generally is imposed on payments of interest
and dividends to (i) foreign financial institutions including non-U.S. investment funds and (ii) certain other foreign entities,
unless the foreign financial institution or foreign entity provides the withholding agent with documentation sufficient to show
that it is compliant with FATCA (generally by providing the Fund with a properly completed Form W-8BEN or Form W-8BEN-E, as applicable).
If the payment is subject to the 30% withholding tax under FATCA, a non-U.S. stockholder will not be subject to the 30% withholding
tax described above on the same income. Starting in 2019, payments of the gross proceeds (including distributions designated as
capital gain dividends to the extent the payment is attributable to property that produces U.S. source interest or dividends)
may also be subject to FATCA withholding absent proof of FATCA compliance prior to January 1, 2019. Stockholders are urged and
advised to consult their own tax advisors regarding the application of this new reporting and withholding regime to their own
tax situation.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>All non-U.S.
stockholders are urged and advised to consult their own tax advisers as to the tax consequences of an investment in the Fund.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">A stockholder
that owns directly or indirectly more than 50% by vote or value of the Fund, is urged and advised to consult its own tax adviser
regarding its filing obligations with respect to IRS Form FinCEN114, Report of Foreign Bank and Financial Accounts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Also, under
recently enacted rules, subject to exceptions, individuals (and, to the extent provided in forthcoming future U.S. Treasury regulations,
certain domestic entities) must report annually their interests in &ldquo;specified foreign financial assets&rdquo; on their U.S.
federal income tax returns. It is currently unclear whether and under what circumstances stockholders would be required to report
their indirect interests in the Fund&rsquo;s &ldquo;specified foreign financial assets&rdquo; (if any) under these new rules.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Stockholders
may be subject to substantial penalties for failure to comply with these reporting requirements. Stockholders are urged and advised
to consult their own tax advisers to determine whether these reporting requirements are applicable to them.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Under Treasury
regulations, if a stockholder recognizes a loss of $2 million or more for an individual stockholder or $10 million or more for
a corporate stockholder, the stockholder must file with the IRS a disclosure statement on Form 8886. The fact that a loss is reportable
under these regulations does not affect the legal determination of whether the taxpayer&rsquo;s treatment of the loss is proper.
Stockholders are urged and advised to consult their own tax advisers to determine the applicability of these regulations in light
of their individual circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
will inform stockholders of the source and tax status of all distributions promptly after the close of each calendar year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Distributions
from the Fund and sales or other dispositions of shares of the Fund may be subject to additional state, local and foreign taxes
depending on each stockholder&rsquo;s particular situation. An investor should also be aware that the benefits of any reduced
tax rate applicable to long-term capital gains and qualified dividend income may be impacted by the application of the alternative
minimum tax to individual stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Stockholders
are urged and advised to consult their own tax advisers as to the federal, state, local, foreign and other tax laws affecting
investments in the Fund and to possible effects of the changes in any such federal, state, local, foreign, or other tax laws.
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>DETERMINATION
OF NET ASSET VALUE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund&rsquo;s
NAV per share will be calculated by the Adviser (i) no less frequently than monthly, (ii) on the last business day of each month
and (iii) at any other times determined by the board. NAV per share is calculated by dividing the value of the Fund&rsquo;s net
assets (the value of its assets less its liabilities) by the total number of shares of common stock outstanding.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">An unaudited NAV per share is
posted daily on the Fund&rsquo;s website at http://www.herzfeld.com/cuba.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In calculating
the NAV per share at any time:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(i)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">the
                                         value of any cash on hand or on deposit, bills and demand notes and accounts receivable,
                                         prepaid expenses, cash dividends and interest declared or accrued and not yet received,
                                         will be its face amount, unless the Adviser has determined that its value is less, in
                                         which case its value will be deemed to be such amount as the Adviser determines to be
                                         reasonable;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-size: 11pt">(ii)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">investments
                                         in securities traded on a national securities exchange (or reported on the NASDAQ National
                                         Market or Capital Market) are stated at the last reported sales price on the day of valuation
                                         (or at the NASDAQ official closing price); other securities traded in the over-the-counter
                                         market and listed securities for which no sale was reported on that date are stated at
                                         the last quoted bid price;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(iii)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">the
                                         value of any security traded in the unregulated market will be determined, by taking
                                         the last quoted bid price;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(iv)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">investments
                                         (if any) in securities of the U.S. government, its agencies and instrumentalities having
                                         a maturity of 60 days or less are valued at amortized cost;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(v)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">the
                                         value of a forward contract is calculated by reference to the price quoted at the date
                                         of valuation of the contract by the customary banking sources of the Fund;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-size: 11pt">(vi)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">the
                                         value of commodity futures or option contracts entered into by the Fund are the margin
                                         deposit plus or minus the difference between the value of the contract on the date NAV
                                         is calculated and the value on the date the contract originated, value being that established
                                         on a recognized commodity or options exchange, or by reference to other customary sources,
                                         with a gain or loss being recognized;</FONT></TD></TR></TABLE>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 25pt"><FONT STYLE="font-size: 11pt">(vii)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">the
                                         value of any security or property for which no price quotation is available as provided
                                         above is the fair value determined in such manner as the board, acting in good faith,
                                         deems appropriate, although the actual calculation may be done by others; and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20pt"></TD><TD STYLE="width: 25pt; text-align: left"><FONT STYLE="font-size: 11pt">(viii)</FONT></TD><TD><FONT STYLE="font-size: 11pt">the liabilities of the
Fund are deemed to include, without limitation, all bills and accounts payable, all other contractual obligations for the payment
of money, including the amount of distributions declared and unpaid, all accrued and unpaid management fees, advisory fees and
other expenses, all reserves for taxes or contingencies and all other liabilities of the Fund determined in accordance with generally
accepted accounting principles.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-align: justify; text-indent: -0.3in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Fund
has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily
available. Under these procedures, the Adviser convenes on a regular and ad hoc basis to review such securities and considers
a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at a fair
value. The Adviser may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions,
market multiples, book values and other relevant information for the investment to determine the fair value of the investment.
An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted
to calculate fair value. Discounts may be applied due to the nature or duration of any restrictions on the disposition of investments.
Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that
would have been used had an active market existed. The Adviser employs various methods for calibrating these valuation approaches
including a regular view of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis
and reviews of any related market activity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Any assets
or liabilities initially expressed in terms of foreign currencies are translated into dollars at a quoted exchange rate or at
such other appropriate rate as may be determined by the Adviser.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>CUSTODIAN,
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND REGISTRAR</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">State Street
Bank and Trust Company acts as custodian for the Fund&rsquo;s assets. The principal address of the custodian is 200 Clarendon
Street, 5<SUP>th</SUP> Floor Boston, MA 02116. The custodian employs sub-custodians in each of the jurisdictions in which the
Fund invests. The custodian&rsquo;s services include, in addition to the custody of all cash and securities owned by the Fund,
the maintenance of a custody account in the custodian&rsquo;s Fund department, the segregation of all certificated securities
owned by the Fund, the appointment of authorized agents as sub-custodians, disbursement of funds from the custody account of the
Fund, releasing and delivering securities from the custody account of the Fund, maintain records with respect to such custody
account, delivering to the Fund a daily and monthly statement with respect to such custody account, and causing proxies to be
executed. The custodian&rsquo;s fee is paid by the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">State Street
Bank and Trust Company also serves as the Fund&rsquo;s transfer agent, dividend/distribution disbursing agent, dividend reinvestment
plan agent and as registrar for the Fund&rsquo;s common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>LEGAL
MATTERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Pepper Hamilton
LLP, 3000 Two Logan Square, 18<SUP>th</SUP> and Arch Streets, Philadelphia, PA 19103 serves as counsel to the Fund.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>EXPERTS
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">The independent registered accounting
firm of the Fund is Tait, Weller &amp; Baker LLP (&ldquo;Tait Weller&rdquo;), located at 1818 Market St., Suite 2400, Philadelphia,
PA 19103. As the independent registered public accounting firm of the Fund, Tait Weller is an expert in accounting and auditing
and audited the Fund&rsquo;s financial statements included in the Fund&rsquo;s Annual Report to Stockholders for the fiscal year
ended June 30, 2017 (the &ldquo;Annual Report&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>FINANCIAL
STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The audited
financial statements and notes thereto in the Annual Report are incorporated by reference into this prospectus. The financial
statements included in the Annual Report have been audited by Tait Weller, whose report thereon is also incorporated herein by
reference. No other parts of the Annual Report are incorporated by reference herein and are not part of the registration statement
or the prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt"><B>AVAILABLE
INFORMATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">We
have filed with the SEC a registration statement on Form N-2 together with related exhibits under the Securities Act. The registration
statement contains information about us and the securities being offered by this prospectus and any accompanying prospectus supplement.
We are also required to file with or submit to the SEC annual, semi-annual and quarterly reports, proxy statements and other information
about us. You may request copies of these reports and filings, including this prospectus and any accompanying prospectus supplement
free of charge, make inquiries or request other information about us by contacting us by mail at 119 Washington Avenue, Suite
504 Miami Beach, FL 33139, or by telephone at (800) TJH-FUND (toll-free) or (305) 271-1900. Copies of these reports and filings
are also available free of charge through our website at <I>http://herzfeld.com/cuba. </I>The inclusion of our website address
in this prospectus and any prospectus supplement is, in each case, intended to be an inactive textual reference only and not an
active hyperlink to our website. The information contained in, or that can be accessed through, our website is not part of this
prospectus or any accompanying prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 11pt">You
may also inspect and copy these reports, proxy statements and other information, as well as this registration statement and related
exhibits and schedules, at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation
of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090 or toll free at 1 (800) SEC-0330. The SEC maintains
an Internet site that contains reports, proxy and information statements and other information filed electronically by us with
the SEC which are available on the SEC's website at <I>http://www.sec.gov. </I>Copies of these reports, proxy and information
statements and other information may also be obtained, after paying a duplicating fee, by electronic request at the following
e-mail address: publicinfo@sec.gov, or by writing to the SEC's Public Reference Section, Washington, D.C. 20549.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>APPENDIX
A</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>THE HERZFELD
CARIBBEAN BASIN FUND, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>Proxy
Voting Policy and Procedures</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">The
Board of Directors of The Herzfeld Caribbean Basin Fund, Inc. (the &ldquo;Fund&rdquo;) hereby adopts the following policy and
procedures with respect to voting proxies relating to portfolio securities held by the Fund:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Policy</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">It
is the policy of the Board of Directors of the Fund (the &ldquo;Board&rdquo;) to delegate the responsibility for voting proxies
relating to portfolio securities held by the Fund to the Fund&rsquo;s investment adviser (the &ldquo;Adviser&rdquo;) as a part
of the Adviser&rsquo;s general management of the Fund, subject to the Board&rsquo;s continuing oversight.<SUP>1</SUP> The voting
of proxies is an integral part of the investment management services that the Adviser provides pursuant to the advisory contract.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">The
Adviser may, but is not required to, delegate the responsibility for voting proxies relating to portfolio securities held by the
Fund to a sub-adviser (&ldquo;Sub-Adviser&rdquo;) retained to provide investment advisory services, if applicable. If such responsibility
is delegated to a Sub-Adviser, then the Sub-Adviser shall assume the fiduciary duty and reporting responsibilities of the Adviser
under these policy guidelines.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Fiduciary
Duty</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">The
right to vote a proxy with respect to portfolio securities held by the Fund is an asset of the Fund. The Adviser, to which authority
to vote on behalf of the Fund is delegated, acts as a fiduciary of the Fund and must vote proxies in a manner consistent with
the best interest of the Fund and its stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Procedures</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">The
following are the procedures adopted by the Board for the administration of this policy:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">A.
<U>Review of Adviser Proxy Voting Procedures</U> . The Adviser with authority to vote proxies on behalf of the Fund shall present
to the Board its policies, procedures and other guidelines for voting proxies at least annually, and must notify the Board promptly
of material changes to any of these documents.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">B.
<U>Voting Record Reporting</U> . No less than annually, the Adviser shall report to the Board a record of each proxy voted with
respect to portfolio securities of the Fund during the year. With respect to those proxies that the Adviser has identified as
involving a conflict of interest<SUP>2</SUP>, the Adviser shall submit a separate report indicating the nature of the conflict
of interest and how that conflict was resolved with respect to the voting of the proxy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Revocation</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">The
delegation by the Board of the authority to vote proxies relating to portfolio securities of the Fund is entirely voluntary and
may be revoked by the Board, in whole or in part, at any time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Annual
Filing</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">The
Fund shall file an annual report of each proxy voted with respect to its portfolio securities during the twelve-month period ended
June 30 on Form N-PX not later than August 31 of each year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 20%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt"><SUP>1</SUP></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">This policy is adopted
for the purpose of the disclosure requirements adopted by the Securities and Exchange Commission, Release Nos. 33-8188, 34-47304,
IC-25922.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt"><SUP>2</SUP></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">As it is used in this document,
the term &ldquo;conflict of interest&rdquo; refers to a situation in which the Adviser or Sub-Adviser or affiliated persons of
the Adviser or Sub-Adviser have a financial interest in a matter presented by a proxy other than the obligation it incurs as investment
adviser to the Fund which compromises the Adviser&rsquo;s or Sub-Adviser&rsquo;s independence of judgment and action with respect
to the voting of the proxy.</FONT></TD>
</TR></TABLE>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Disclosures</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">The
Fund shall include in its annual report to stockholders:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">A
description of this policy and of the policies and procedures used by the Adviser to determine how to vote proxies relating to
portfolio securities<SUP>3</SUP>; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">A
statement disclosing that information regarding how the Fund voted proxies relating to portfolio securities during the most recent
12-month period ended June 30 is available without charge, upon request, by calling the Fund&rsquo;s toll-free telephone number
and on the SEC website.<SUP>4 </SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">The
Fund shall also include in its annual and semi-annual reports to stockholders:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">A
statement disclosing that a description of the policies and procedures used by or on behalf of the Fund to determine how to vote
proxies relating to portfolio securities of the Funds is available without charge, upon request, by calling the Fund&rsquo;s toll-free
telephone number and on the SEC website.<SUP>5 </SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">A
statement disclosing that information regarding how the Fund voted proxies relating to portfolio securities during the most recent
12-month period ended June 30 is available without charge, upon request, by calling the Fund&rsquo;s toll-free telephone number
and on the SEC website.<SUP>6</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Review
of Policy</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">At
least annually, the Board shall review this Policy to determine its sufficiency and shall make and approve any changes that it
deems necessary from time to time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt"><SUP>3</SUP></FONT></TD><TD><FONT STYLE="font-size: 11pt">This disclosure shall be
included in the annual report next filed by the Fund, on Form N-CSR on or after July 1, 2003.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt"><SUP>4</SUP></FONT></TD><TD><FONT STYLE="font-size: 11pt"><I>Id.</I></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt"><SUP>5</SUP></FONT></TD><TD><FONT STYLE="font-size: 11pt">This disclosure shall be
included in the report next filed by the Fund on or after July 1, 2003.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt"><SUP>6</SUP></FONT></TD><TD><FONT STYLE="font-size: 11pt"><I>Id.</I></FONT></TD>
</TR></TABLE>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>APPENDIX
B</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>THOMAS
J. HERZFELD ADVISORS, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>PROXY
VOTING</B><BR>
<B>POLICIES AND PROCEDURES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>I. POLICY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Thomas J.
Herzfeld Advisors, Inc. (the &ldquo;Adviser&rdquo;) acts as discretionary investment adviser for various clients, including The
Herzfeld Caribbean Basin Fund, Inc., an investment company registered under the Investment Company Act of 1940, as amended, and
clients governed by the Employee Retirement Income Security Act of 1974 (&ldquo;ERISA&rdquo;). Selected clients, including the
Caribbean Basin Fund, Inc. have elected to have the Adviser vote proxies or act on the other shareholder actions on their behalf,
while other clients vote proxies themselves.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">When voting
proxies or acting on corporate actions for clients, the Adviser&rsquo;s utmost concern is that all decisions be made in the best
interest of its clients (for ERISA accounts, plan beneficiaries and participants, in accordance with the letter and spirit of
ERISA). The Adviser will act in a manner deemed prudent and diligent and which is intended to enhance the economic value of the
assets of its clients&rsquo; accounts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>II. PURPOSE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The purpose
of these Policies and Procedures is to memorialize the procedures and policies adopted by the Adviser to enable it to comply with
its responsibilities and the requirements of Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended (&ldquo;Advisers
Act&rdquo;). These Policies and Procedures also reflect the fiduciary standards and responsibilities set forth by the Department
of Labor for ERISA accounts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>III.
PROCEDURES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Portfolio
Managers are ultimately responsible for ensuring that all proxies received by the Adviser are voted in a timely manner and voted
consistently across all portfolios. Although many proxy proposals can be voted in accordance with the Adviser&rsquo;s established
guidelines (see Section V. below) (the &ldquo;Guidelines&rdquo;), the Adviser recognizes that certain circumstances may require
special consideration, which may dictate that the Adviser makes an exception to the provisions of these Procedures. When an exception
is made to these Procedures, the Portfolio Managers shall provide to the Chief Compliance Officer of the Adviser (&ldquo;CCO&rdquo;)
a written statement detailing the circumstances and rationale for an exception from these Policies and Procedures.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Portfolio
Managers are also responsible for ensuring that all corporate actions received by the Adviser are addressed in a timely manner
and consistent action is taken across all portfolios.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">A.
<U>Conflicts of Interest</U> . Where a proxy proposal raises a material conflict of interest between the Adviser&rsquo;s interests
and that of one or more its clients, the Adviser shall resolve such conflict in the manner described below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">1.
<U>Vote in Accordance with the Guidelines</U> . To the extent that the Adviser <I>has little or no discretion</I> to deviate from
the Guidelines with respect to the proposal in question, the Adviser shall vote in accordance with such pre-determined voting
policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">2.
<U>Obtain Consent of Clients</U> . To the extent that the Adviser <I>has discretion</I> to deviate from the Guidelines with respect
to the proposal in question, the Adviser shall disclose the conflict to the relevant clients and obtain their consent to the proposed
vote prior to voting the securities. The disclosure to the clients will include sufficient detail regarding the matter to be voted
on and the nature of our conflict that the clients would be able to make an informed decision regarding the vote. When a client
does not respond to such a conflict disclosure request or denies the request, the Adviser will abstain from voting the securities
held by that client&rsquo;s account.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">B.
<U>Limitations</U> . In certain circumstances, in accordance with a client&rsquo;s investment advisory contract (or other written
directive) or where the Adviser has determined that it is in the client&rsquo;s best interest, the Adviser will not vote proxies
received. The following are some circumstances where the Adviser will limit its role in voting proxies received on client securities:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">1.
<U>Client Maintains Proxy Voting Authority</U> : Where a client has not specifically delegated the authority to vote proxies to
the Adviser or that it has delegated the right to vote proxies to a third party, the Adviser will not vote the securities and
will direct the relevant custodian to send the proxy material directly to the client. If any proxy material is received by the
Adviser, it will promptly be forwarded to the client.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">2.
<U>Terminated Account</U> : Once a client account has been terminated with the Adviser in accordance with its investment advisory
agreement, the Adviser will not vote any proxies received after the termination. However, the client may specify in writing that
proxies should be directed to the client for action.</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">3.
<U>Limited Value</U> : If the Adviser concludes that the client&rsquo;s economic interest or the value of the portfolio holding
is indeterminable or insignificant, the Adviser will abstain from voting a client&rsquo;s proxies. The Adviser generally does
not vote proxies received for securities which are not held in the client&rsquo;s account at the time the proxies are received;
although it may vote such proxies if determined to be in the best interests of the client. In addition, the Adviser generally
does not vote securities where the economic value of the securities in the client&rsquo;s account is less than $500.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">4.
<U>Securities Lending Programs</U> : When securities are out on loan, they are transferred into the borrower&rsquo;s name and
are voted by the borrower, in its discretion. However, where the Adviser determines that a proxy vote (or shareholder action)
is materially important to the client&rsquo;s account, the Adviser may recall the security.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">5.
<U>Unjustifiable Costs</U> : In certain circumstances, after doing a cost-benefit analysis, the Adviser may abstain from voting
where the cost of voting a client&rsquo;s proxy would exceed any anticipated benefits of the proxy proposal.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>IV. RECORD
KEEPING</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">In accordance
with Rule 204-2 under the Advisers Act, the Adviser will maintain for the time periods set forth in the Rule (i) these proxy voting
procedures and policies, and amendments thereto; (ii) all proxy statements received regarding client securities (provided however,
that the Adviser may rely on the proxy statement filed on EDGAR as its records)<SUP>1</SUP> ; (iii) a record of votes cast on
behalf of clients; (iv) records of client requests for proxy voting information; (v) any documents prepared by the adviser that
were material to making a decision how to vote or that memorialized the basis for the decision; and (vi) records relating to requests
made to clients regarding conflicts of interest in voting the proxy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">The Adviser
will describe in its Part II of Form ADV (or other brochure fulfilling the requirement of Rule 204-3) its proxy voting policies
and procedures and advising clients how they may obtain information on how the Adviser voted their securities. Clients may obtain
information on how their securities were voted or a copy of our Policies and Procedures by written request addressed to the Adviser.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>V. GUIDELINES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Each proxy
issue will be considered individually. The following guidelines are a partial list to be used in voting proposals contained in
the proxy statements, but will not be used as rigid rules.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">1.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">Issues regarding the issuer&rsquo;s Board entrenchment and anti-takeover measures
    such as the following:</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Oppose</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 77%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">b.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Proposals to limit the ability of shareholders to call special meetings;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">c.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Proposals to require super majority votes;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">d.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Proposals requesting excessive increases in authorized common or preferred shares where
    management provides no explanation for the use or need for these additional shares;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">e.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Proposals regarding &ldquo;poison pill&rdquo; provisions; and</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">f.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Permitting &ldquo;green mail&rdquo;.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">2.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">Providing cumulative voting rights.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Oppose</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">3.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">&ldquo;Social issues,&rdquo; unless specific client guidelines supersede, e.g.,
    restrictions regarding South Africa.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Oppose</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">4.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">Election of directors recommended by management, except if there is a proxy
    fight.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">5.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">Election of auditors recommended by management, unless seeking to replace if
    there exists a dispute over policies.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">6.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">Date and place of annual meeting.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">7.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">Limitation on charitable contributions or fees paid to lawyers.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">8.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">Ratification of directors&rsquo; actions on routine matters since previous annual
    meeting.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">9.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">Confidential voting</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt">Confidential
voting is most often proposed by shareholders as a means of eliminating undue management pressure on shareholders regarding their
vote on proxy issues.&nbsp; &nbsp; &nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt">The Adviser will generally approve these proposals as shareholders can later divulge their votes to management on a selective basis if a legitimate reason arises.</FONT> <FONT STYLE="font-size: 11pt">&nbsp;</FONT> <FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 20%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt"><SUP>1</SUP></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Because the Adviser primarily
invests its clients&rsquo; assets in securities of foreign issuers, the Adviser generally has not been receiving proxy statements
from such issuers because the laws of the countries in which these issuers are domiciled respecting delivery of proxy statements
to shareholders are different than those of the U.S.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">10.</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 82%"><FONT STYLE="font-size: 11pt">Limiting directors&rsquo; liability</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">11.</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 82%"><FONT STYLE="font-size: 11pt">Eliminate preemptive right</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Preemptive rights give current shareholders the opportunity to maintain their current percentage ownership through any subsequent equity offerings. These provisions are no longer common in the U.S., and can restrict management&rsquo;s ability to raise new capital.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">The Adviser approves the elimination of preemptive rights, but will oppose the elimination of limited preemptive rights, e.g., on proposed issues representing more than an acceptable level of total dilution.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">12.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Employee Stock Purchase Plan</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">13.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Establish 401(k) Plan</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">14.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Rotate annual meeting location/date</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">15.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Establish a staggered Board</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Approve</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">16.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Eliminate director mandatory retirement policy</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Case-by-Case</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">17.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Option and stock grants to management and directors</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Case-by-Case</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">18.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Allowing indemnification of directors and/or officers after reviewing the applicable laws
    and extent of protection requested.</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">Case-by-Case</FONT></TD></TR>
</TABLE>



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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>





<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART C - OTHER INFORMATION</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 25.</B></TD><TD STYLE="text-align: justify"><B>FINANCIAL STATEMENTS AND EXHIBITS</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(1)</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Financial Statements:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="4"><P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
        following financial statements of The Herzfeld Caribbean Basin Fund, Inc. (the &ldquo;Registrant&rdquo;) are incorporated
        by reference in Part A of this Registration Statement.</FONT></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(a)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Schedule of Investments as of June
    30, 2017.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(b)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Statement of Assets and Liabilities
    as of June 30, 2017.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(c)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Statement of Operations for the
    Year Ended June 30, 2017.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(d)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Statements of Changes in Net Assets
    for the Years Ended June 30, 2017 and 2016.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(e)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Financial Highlights for the Years
    Ended June 30, 2013 through 2017.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(f)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Notes to Financial Statements dated
    June 30, 2017.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(g)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Schedule of Investments as of December
    31, 2017 (unaudited).**</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(h)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Statement of Assets and Liabilities
    as of December 31, 2017 (unaudited).**</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(i)</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Statement of Operations for the
    Six Months Ended December 31, 2017(unaudited).**</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(j)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Statements
    of Changes in Net Assets for the Six Months Ended December 31, 2017 (unaudited) and the Year Ended June 30, 2017.**</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(k)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Notes
    to Financial Statements dated December 31, 2017.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">*Incorporated
        by reference to the Registrant&rsquo;s Annual Report to Stockholders for fiscal year ended June 30, 2017 filed on Form
        N-CSR, with the Securities and Exchange Commission (the &ldquo;SEC&rdquo;) on August 29, 2017 (Investment Company Act
        File No. 811-06445).&nbsp;</FONT></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">**Incorporated
        by reference to the Registrant&rsquo;s Semi-Annual Report to Stockholders for the six months ended December 31, 2017 filed
        on Form N-CSRS, with the SEC on February 28, 2018 (Investment Company Act File No. 811-06445).&nbsp;</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(2)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Exhibits</FONT></TD></TR>
<TR>
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 93%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 1pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The agreements included or incorporated
by reference as exhibits to this registration statement contain representations and warranties by each of the parties to the applicable
agreement. These representations and warranties were made solely for the benefit of the other parties to the applicable agreements
and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of
the parties if those statements prove to be inaccurate; (ii) may have been qualified in such agreement by disclosures that were
made to the other party in connection with the negotiation of the applicable agreement; (iii) may apply contract standards of &ldquo;materiality&rdquo;
that are different from &ldquo;materiality&rdquo; under the applicable securities laws; and (iv) were made only as of the date
of the applicable agreement or such other date or dates as may be specified in the agreement. For the foregoing reasons, the representations,
warranties and covenants or any descriptions of those provisions should not be read alone and should instead be read in conjunction
with the other information contained in the reports, statements and filings that the Registrant publicly files with the Commission.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Registrant acknowledges that, notwithstanding
the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures
of material information regarding material contractual provisions are required to make the statements in this registration statement
not misleading.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">(a)</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">(1)</FONT></TD>
    <TD STYLE="width: 91%"><FONT STYLE="font-size: 11pt">Articles of Incorporation filed with the State of Maryland dated March 10, 1992<B>.</B>(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(2)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Articles of Amendment to Articles of Incorporation as filed with the State of Maryland on July 23, 1993.(1)</FONT></TD></TR>
</TABLE>


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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">(b)</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 91%"><FONT STYLE="font-size: 11pt">By Laws.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(c)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(d)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">(1)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Form of Specimen Certificate of Common Stock.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(2)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Articles Sixth, Eighth, Ninth and Tenth of the Registrant&rsquo;s Articles of Incorporation filed as exhibit (a).</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(3)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Articles II and III of the Registrant&rsquo;s By Laws filed as exhibit (b).</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(e)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Dividend Reinvestment Plan.(2)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(f)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(g)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Investment Advisory Agreement dated September 10, 1993.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(h)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(i)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(j)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">(1)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Custodian Agreement dated December 30, 1993, as amended March 28, 2003.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(2)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Amendment to Custodian Agreement and Transfer Agency Services Agreement dated August 16, 2012.(3)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(k)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(l)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Opinion of Pepper Hamilton LLP dated May 4, 2018 is filed herewith. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(m)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(n)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Consent of Tait, Weller &amp; Baker LLP dated May 4, 2018 is filed herewith.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(o)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(p)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(q)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(r)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Joint Code of Ethics of the Registrant and the Adviser.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(s)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Powers of Attorney is filed herewith.&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">(t)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Forms of Prospectus Supplement is filed herewith.</FONT></TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Incorporated by reference
to the Registrant&rsquo;s Registration Statement on Form N-2 filed with the SEC on July 25, 2007 (Securities Act File No. 333-144838
and Investment Company Act File No. 811-06445).</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Incorporated by reference
to Exhibit 99.2 to Form 8-K/A filed with the SEC on November 22, 2006 (Investment Company Act File No. 811-06445).</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 11pt">(3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Incorporated by reference
to Post-Effective Amendment No. 1 to Registrant&rsquo;s Registration Statement on Form N-2 filed with the SEC on September 10,
2015 (Securities Act File No. 333-202213 and Investment Company Act File No. 811-06445).</FONT></TD>
</TR></TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 26.</B></TD><TD STYLE="text-align: justify"><B>MARKETING ARRANGEMENTS</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The information contained under the heading &ldquo;Plan of Distribution&rdquo;
in this Registration Statement is incorporated herein by reference.</P>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 27.</B></TD><TD STYLE="text-align: justify"><B>OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 11pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="width: 87%; text-align: left; padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">SEC
    registration fees</FONT></TD><TD STYLE="width: 1%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">10,956</FONT></TD><TD STYLE="width: 2%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">(1)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">FINRA
    filing fees</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: left; padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">NASDAQ
    Capital Market Listing of Additional Shares fee</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Printing
    (other than stock certificates)</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: left; padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Accounting
    fees and expenses</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Legal
    fees and expenses</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: left; padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Sales
    agent&rsquo;s expenses</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Miscellaneous</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="padding-left: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Total</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt">*</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Fees depend on number of
issuances and amount of securities sold and cannot be estimated at this time.</FONT></TD>
</TR></TABLE>

<P STYLE="margin: 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-size: 11pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Previously
                                         paid with the Registrant&rsquo;s Form N-2 filed with the SEC on February 20, 2015 (Securities
                                         Act File No. 333-144838 and Investment Company Act File No. 811-06445).</FONT></TD>
</TR></TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 28.</B></TD><TD STYLE="text-align: justify"><B>PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">None</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 29.</B></TD><TD STYLE="text-align: justify"><B>NUMBER OF HOLDERS OF SECURITIES</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 83%; border-top: black 1pt solid; border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt"><B>Title of Class</B></FONT></TD>
    <TD STYLE="width: 2%; border-top: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 15%; border-top: black 1pt solid; border-bottom: black 1pt solid; padding: 1.5pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Number of&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Record Holders</B>&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>as of</B>&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>April 30, 2018</B>&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top; background-color: gainsboro">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-size: 11pt">Common Stock, $0.001 par value</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt"><B>82</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 30.</B></TD><TD STYLE="text-align: justify"><B>INDEMNIFICATION</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">It is the Registrant&rsquo;s policy to
indemnify its directors and officers to the maximum extent permitted by Section 2-418 of the General Corporation Law of the State
of Maryland as set forth in Article VII of the Registrant&rsquo;s By-Laws filed as exhibit 2(b) of Item 25 hereto, subject to the
limitations of the Investment Company Act of 1940, as amended. The Registrant&rsquo;s indemnification obligations with respect
to each officer and director as set forth in Article VII of the Registrant&rsquo;s By-Laws further provide for the payment of,
and advancement of, any reasonable expenses incurred in connection with the successful defense of any proceeding to which each
such officer or director is a party by reason of service in such capacity. The Registrant&rsquo;s indemnification obligations with
respect to the Adviser are set forth in Section 5 of the Investment Advisory Agreement filed as exhibit 2(g) of Item 25 hereto.
The Registrant has purchased insurance insuring its directors and officers against certain liabilities incurred in their capacities
as such, and insuring the Registrant against any payments which it is obligated to make to such persons under the foregoing indemnification
provisions.</P>





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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Insofar as
indemnification for liabilities arising under the Securities Act, may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action,
suit or </FONT>proceeding<FONT STYLE="font-size: 11pt">) is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 31.</B></TD><TD STYLE="text-align: justify"><B>BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -1.5in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">Registrant
is fulfilling the requirement of this Item 31 to provide a list of the officers and directors of its investment adviser, together
with information as to any other business, profession, vocation or employment of a substantial nature engaged in by those entities
or those of its officers and directors during the past two years, by incorporating herein by reference the information contained
in the current Form ADV filed on </FONT>March <FONT STYLE="font-size: 11pt">28, 2018 with the SEC by Thomas J. Herzfeld Advisors,
Inc. (Investment Advisers Act File No. 801- 20866) pursuant to the Investment Advisers Act of 1940, as amended, and in the section
entitled &ldquo;Management of the Fund&rdquo; in Part A of this Registration Statement.</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 32.</B></TD><TD STYLE="text-align: justify"><B>LOCATION OF ACCOUNTS AND RECORDS</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">All such
books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 through
31a-3 thereunder are maintained at the following locations: Thomas J. </FONT>Herzfeld <FONT STYLE="font-size: 11pt">Advisors, Inc.,
119 Washington Avenue, Suite 504 Miami Beach, FL 33139; 10491 SW 97<SUP>th</SUP> Avenue Miami, FL 33176, Iron Mountain, 13700 NW
2<SUP>nd</SUP> Street Sunrise, FL 33325 and State Street Bank and Trust Company, 1 Lincoln Street, Boston, MA 02111.</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 33</B></TD><TD STYLE="text-align: justify"><B>MANAGEMENT SERVICES</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Not </FONT>applicable<FONT STYLE="font-size: 11pt">.</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 80pt; text-align: left"><B>ITEM 34.</B></TD><TD STYLE="text-align: justify"><B>UNDERTAKINGS</B></TD>
</TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The Registrant hereby undertakes:</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify; width: 97%"><FONT STYLE="font-size: 11pt">to suspend the offering of shares until the prospectus is amended if: (i) subsequent to the effective date of this Registration Statement, the net asset value per share declines more than 10% from its net asset value per share as of the effective date of this Registration Statement; or (ii) the net asset value increases to an amount greater than its net proceeds as stated in the prospectus.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">(2)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">if the securities being registered are to be offered to existing stockholders pursuant to warrants or rights, and any securities not taken by stockholders are to be reoffered to the public, to supplement the prospectus, after the expiration of the subscription period, to set forth the results of the subscription offer, the transactions by underwriters during the subscription period, the amount of unsubscribed securities to be purchased by underwriters, and the terms of any subsequent reoffering thereof, and further, if any public offering by the underwriters of the securities being registered is to be made on terms differing from those set forth on the cover page of the prospectus, to file a post-effective amendment to set forth the terms of such offering.</FONT></TD></TR>
</TABLE>


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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 11pt">(4)</FONT></TD>
    <TD STYLE="text-align: justify; width: 97%"><FONT STYLE="font-size: 11pt">(a)&nbsp;to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(1) to include any prospectus required by Section&nbsp;10(a)(3) of the Securities Act of 1933, as amended, or the Securities Act;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(2) to reflect in the prospectus any facts or events after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(3) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(b) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of those securities at that time shall be deemed to be the initial <I>bona fide</I> offering thereof;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(c) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(d) that, for the purpose of determining liability under the Securities Act to any purchaser, if the Registrant is subject to Rule 430C [17 CFR 230.430C]: Each prospectus filed pursuant to Rule 497(b), (c), (d)&nbsp;or (e)&nbsp;under the Securities Act [17 CFR 230.497(b), (c), (d)&nbsp;or (e)] as part of a registration statement relating to an offering, other than prospectuses filed in reliance on Rule 430A under the Securities Act [17 CFR 230.430A], shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. <I>Provided, however,</I> that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and</FONT></TD></TR><TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(e) that for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution of securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to the purchaser:</FONT></TD></TR>
</TABLE>


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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 97%"><FONT STYLE="font-size: 11pt">(1) any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 497 under the Securities Act [17 CFR 230.497];</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(2) the portion of any advertisement pursuant to Rule 482 under the Securities Act [17 CFR 230.482] relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">(3) any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">(5)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">that: (a) for purpose of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective; and (b) for the purpose of determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial <I>bona fide</I> offering thereof.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">(6)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Not applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 11pt">(7)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 11pt">Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant, pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.</FONT></TD></TR></TABLE>
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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SIGNATURES</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Pursuant to the requirements
of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement on Form N-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Miami
Beach, and State of Florida, on the 4th day of May, 2018.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">THE HERZFELD CARIBBEAN BASIN FUND, INC.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 35%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">By:</TD>
    <TD STYLE="border-bottom: black 1pt solid">/s/ Erik M. Herzfeld</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Erik M. Herzfeld</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>President</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Pursuant to the requirements
of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities
and on the date indicated.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 35%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">Name</FONT></TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 30%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">Title</FONT></TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 25%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt">Date</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt">/s/ Ann S. Lieff*</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">Director</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">May 4, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">Ann S. Lieff</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt">/s/ Kay W. Tatum*</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">Director</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">May 4, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">Kay W. Tatum</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt">/s/ John A. Gelety*</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">Director</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">May 4, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">John A. Gelety</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt">/s/ Cecilia L. Gondor*</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">Director</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">May 4, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.7pt; padding-left: 20pt; text-indent: -20pt"><FONT STYLE="font-size: 11pt">Cecilia L. Gondor</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt">/s/ Thomas J. Herzfeld</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">Chairman and Director </FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">May 4, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">Thomas J. Herzfeld</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt">/s/ Erik M. Herzfeld</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">President (Principal Executive Officer)</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">May 4, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.7pt; padding-left: 20pt; text-indent: -20pt"><FONT STYLE="font-size: 11pt">Erik M. Herzfeld</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt">/s/ Reanna J. M. Lee</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Secretary, Treasurer and&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Chief Compliance Officer&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Principal Financial Officer)&nbsp;</P></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 11pt">May 4, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">Reanna J. M. Lee</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%"><FONT STYLE="font-size: 11pt">* By:</FONT></TD>
    <TD STYLE="width: 30%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">/s/ Erik M. Herzfeld </FONT></TD>
    <TD STYLE="width: 65%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 11pt">Erik M. Herzfeld</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 11pt">Attorney-In-Fact pursuant to a power of attorney signed by each individual on March 21, 2018.</FONT></TD></TR>
</TABLE>










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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT INDEX</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <TD STYLE="width: 10%; border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt"><B>Exhibit No.</B></FONT></TD>
    <TD STYLE="width: 90%; border-bottom: black 1pt solid"><FONT STYLE="font-size: 11pt"><B>Description of Exhibit</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">(l)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Opinion of Pepper Hamilton LLP</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 11pt">(n)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Consent of Tait, Weller &amp; Baker LLP.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font-size: 11pt">(t)</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">Forms of Prospectus Supplement</FONT></TD></TR>
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<P STYLE="margin: 0"></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red"><IMG SRC="fp0033212_04.jpg" ALT="(pepper hamilton llp logo)"></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 8.5pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">3000 Two Logan Square&nbsp;</FONT></P>

<P STYLE="font: 8.5pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Eighteenth and Arch Streets&nbsp;</FONT></P>

<P STYLE="font: 8.5pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Philadelphia, PA 19103-2799&nbsp;</FONT></P>

<P STYLE="font: 8.5pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">215.981.4000&nbsp;</FONT></P>

<P STYLE="font: 8.5pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Fax 215.981.4750</FONT></P>

<P STYLE="font: 8.5pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt">May 4, 2018</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

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    <TD STYLE="width: 50%; padding-right: 5.4pt"><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">The
Herzfeld Caribbean Basin Fund, Inc.&nbsp;</FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">119 Washington Avenue,
Suite 504&nbsp;</FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Miami Beach, FL 33139</FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P></TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 12pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20%; font-size: 12pt; text-align: right"> <FONT STYLE="font-size: 11pt">Re:&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="width: 80%; padding-right: 5.4pt"><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>The
Herzfeld Caribbean Basin Fund, Inc.&nbsp;</U></FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Investment Company
Act of 1940 File No. 811-06445</U>&nbsp;</FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"><U>Shelf Offering&nbsp;</U></FONT></P></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Ladies and Gentlemen:</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">We have acted
as counsel to The Herzfeld Caribbean Basin Fund, Inc., a corporation formed under the laws of the State of Maryland (the &ldquo;Company&rdquo;
or &quot;Fund&quot;), in connection with the registration, under the 1933 Act, of the proposed offering by the Company of additional
shares of common stock, par value $0.001 per share (the &ldquo;Shares&rdquo;)&nbsp; on an immediate, delayed or continuous basis
in reliance on Rule&nbsp;415 under the 1933 Act.&nbsp; The Company is registering currently $88,000,000 of Shares, in accordance
with the Fund&rsquo;s registration statement on Form N-2 (File No. 811-06445) (the &quot;Registration Statement&quot;) filed with
the Securities and Exchange Commission under the Securities Act of 1933, as amended (the &quot;1933 Act&quot;) and the Investment
Company Act of 1940, as amended (the &ldquo;1940 Act&rdquo;).</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">You have requested
our opinion as to the matters set forth below in connection with the filing of the Registration Statement. For purposes of rendering
that opinion, we have examined the Fund&rsquo;s Registration Statement, the Articles of Incorporation and By-Laws of the Fund,
and the action of the Fund that provides for the issuance of the Shares, and we have made such other investigation as we have
deemed appropriate. We have examined and relied upon certificates of public officials and, as to certain matters of fact that
are material to our opinions, we have also relied on a certificate of an officer of the Fund. In rendering our opinion, we also
have made the assumptions that are customary in opinion letters of this kind. We have not verified any of those assumptions.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">Our opinion,
as set forth herein, is limited to the federal laws of the United States of America and the laws of the State of Maryland that,
in our experience, generally are applicable to the issuance of shares by entities such as the Fund. We express no opinion with
respect to any other laws.</FONT></P>



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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">The Herzfeld Caribbean Basin Fund, Inc&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">Page 2&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">May 4, 2018</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">Based upon
and subject to the foregoing, we are of the opinion that:</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">1. The Shares
to be issued pursuant to the Registration Statement have been duly authorized for issuance by the Fund; and</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">2. When issued
and paid for upon the terms provided in the Registration Statement, the Shares to be issued pursuant to the Registration Statement
will be validly issued, fully paid and nonassessable.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">This opinion
is rendered solely in connection with the filing of the Registration Statement. We hereby consent to the filing of this opinion
with the SEC in connection with the Registration Statement and to the reference to this firm in the prospectus that is being filed
as part of the Registration Statement. In giving our consent we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the 1933 Act or the rules and regulations of the SEC thereunder.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 12pt"><FONT STYLE="font-size: 11pt">Very truly
    yours,</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 12pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">/s/
Pepper Hamilton LLP&nbsp;</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 12pt"><FONT STYLE="font-size: 11pt">Pepper Hamilton LLP</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 12pt"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
</TABLE>
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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%; padding-right: 1.35pt; font-size: 12pt"><FONT STYLE="font-size: 11pt">cc:</FONT></TD>
    <TD STYLE="width: 95%; padding-right: 5.4pt"><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Mr. Erik M. Herzfeld,
        President</FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt"></FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Reanna J.M. Lee, Esq.&nbsp;</FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 11pt">Joseph V. Del Raso, Esq.&nbsp;</FONT></P></TD></TR>
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<P STYLE="font: bold 13pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT>CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</P>

<P STYLE="font: bold 13pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">We have
issued our report dated August 17, 2017 with respect to the financial statements and financial highlights of The Herzfeld Caribbean
Basin Fund, Inc. contained in the Registration Statement and Prospectus on Form N-2, as amended, and referenced in the aforementioned
report. We consent to the use of the aforementioned report in such Registration Statement and Prospectus, and to the use of our
name as it appears in such Registration Statement and Prospectus. </FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 12pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%"><FONT STYLE="font-size: 11pt"><B>/s/
TAIT, WELLER &amp; BAKER LLP</B></FONT></TD></TR>
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3.25in"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Philadelphia,
Pennsylvania</B>&nbsp;</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 11pt"><B>May 4,
2018</B></FONT></P>

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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="fp0033212_02.jpg" ALT="(GRAPHIC)">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; color: #C10000"><B>The information in this prospectus is not
complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer and sale is not permitted.</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; color: #C10000">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>[FORM OF PROSPECTUS SUPPLEMENT] </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(To Prospectus dated [ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2018) </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>THE HERZFELD
CARIBBEAN BASIN FUND, INC.</B></FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 40pt"><B>[ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;] Shares</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 40pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Common Stock </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The Herzfeld Caribbean Basin Fund, Inc. (the &ldquo;Fund&rdquo;)
is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, or the &ldquo;1940
Act.&rdquo; The Fund&rsquo;s investment adviser is HERZFELD/CUBA, a division of Thomas J. Herzfeld Advisors, Inc., or the &ldquo;Adviser.&rdquo;
The Fund&rsquo;s investment objective is long-term capital appreciation. To achieve our objective, we invest in issuers that are
likely, in the Adviser&rsquo;s view, to benefit from economic, political, structural and technological developments in the countries
in the Caribbean Basin, which include, among others, Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados,
Aruba, Haiti, the former Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica,
Panama, Colombia, the United States and Venezuela, or the &ldquo;Caribbean Basin Countries.&rdquo; We invest at least 80% of our
total assets in equity and equity-linked securities of issuers, including U.S.-based companies which engage in substantial trade
with, and derive substantial revenue from, operations in the Caribbean Basin Countries. The Fund may invest more than 25% of its
total assets in the securities of U.S.-based companies, which constituted approximately [ ] of the Fund&rsquo;s total assets as
of [ ]. Total assets includes the amount of any borrowings for investment purposes. At such time as it becomes legally permissible
for U.S. entities to invest directly in Cuba, the Fund will consider such investments. For additional information, see &ldquo;Investment
Objective and Policies&rdquo; in the accompanying prospectus. Equity and equity-linked securities include, but are not limited
to, common stock, preferred stock, debt securities convertible into equity, warrants, options and futures. An investment in the
Fund is not appropriate for all investors and should not constitute a complete investment program. No assurances can be given that
our investment objective will be achieved.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.5pt 0pt 0pt">Our common stock is traded on the NASDAQ Capital
Market under the symbol &ldquo;CUBA.&rdquo; On [ ], 2018, the last reported sales price on the NASDAQ Capital Market for our common
stock was $[ ] per share. We determine the NAV per share of our common stock no less frequently than monthly. Our NAV per share
of our common stock as of [ ], 2018 was $[ ] (unaudited) and our total net assets were $[ ] (unaudited). As of [ ], 2018, there
were [ ] shares of our common stock outstanding.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.5pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">You should review the information set forth under &ldquo;Risk
Factors and Special Considerations&rdquo; on page [ ] of the accompanying prospectus before investing in our common stock or preferred
stock.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Per Common Share</B></FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Total<SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt; width: 65%"><FONT STYLE="font-size: 11pt">Public Offering Price</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; width: 13%"><FONT STYLE="font-size: 11pt">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%"><FONT STYLE="font-size: 11pt">] </FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; width: 13%"><FONT STYLE="font-size: 11pt">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%"><FONT STYLE="font-size: 11pt">] </FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt">Underwriting discounts and commissions</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 11pt">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">] </FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 11pt">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">] </FONT></TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt">Proceeds, before expenses, to us</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 11pt">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">] </FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 11pt">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">] </FONT></TD>
    </TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20pt; border-top: Black 1pt solid"><FONT STYLE="font-size: 11pt">(1)</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid"><FONT STYLE="font-size: 11pt">The aggregate expenses of the offering are estimated to be $[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], which represents approximately $[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;] per share. </FONT></TD></TR>
</TABLE>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The underwriters may also
purchase up to an additional [ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;] common stock from us at the public offering price, less underwriting discounts and commissions,
to cover over-allotments, if any, within [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ] days after the date of this Prospectus Supplement. If the over-allotment option is
exercised in full, the total proceeds, before expenses, to the Fund would be $[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ] and the total underwriting discounts and commissions
would be $[ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]. The common stock will be ready for delivery on or about [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , ].</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">Please carefully read this prospectus supplement and the
accompanying prospectus before investing in our common stock and keep each for future reference. This prospectus supplement
and the accompanying prospectus set forth concisely important information about us that a prospective investor ought to know
before investing in our securities. The Fund is required to file with or submit to the U.S. Securities and Exchange
Commission, or &ldquo;SEC,&rdquo; annual, semi-annual and quarterly reports, proxy statements and other information about us.
You may request copies of these reports and filings, including this prospectus supplement and accompanying prospectus, free
of charge, make inquiries or request other information about us by contacting us by mail at 119 Washington Avenue, Suite 504
Miami Beach, FL 33139 or by telephone at (800) TJH-FUND (toll-free) or (305) 271-1900. Copies of these reports and filings
are also available free of charge through our website at <I>http://herzfeld.com/cuba</I>. The SEC also maintains a website at <I>http://www.sec.gov </I>that
contains this information. The inclusion of our website address above and elsewhere in this prospectus supplement and the
accompanying prospectus is, in each case, intended to be an inactive textual reference only and not an active hyperlink to
our website. The information contained in, or that can be accessed through, our website is not part of this prospectus
supplement or the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>An investment in our common stock should be considered speculative
and involves a high degree of risk, including the risk of a total loss of investment. Shares of closed-end investment companies
frequently trade at a discount to their net asset value. See &ldquo;Prospectus Supplement Summary&mdash;Summary Risk Factors&rdquo;
beginning on page S-[ ] of this prospectus supplement, &ldquo;Supplemental Risk Factors&rdquo; beginning on page S-[ ] of this
prospectus supplement, &ldquo;Prospectus Summary&mdash;Risk Factors and Special Considerations&rdquo; beginning on page [ ] of
the accompanying prospectus and &ldquo;Risk Factors and Special Considerations&rdquo; beginning on page [ ] of the accompanying
prospectus to read about the risks you should carefully consider before investing in our common stock.</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Neither the SEC nor any state securities commission has approved
or disapproved these securities or determined if the prospectus or this prospectus supplement is truthful or complete. Any representation
to the contrary is a criminal offense. </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>You should rely only on the information contained or incorporated
by reference in this prospectus supplement and the accompanying prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We
are not making an offer to sell these securities in any jurisdiction in which the offer or sale is not permitted. </B></P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TABLE OF CONTENTS </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS SUPPLEMENT</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>



<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="width: 100%; border-collapse: collapse; font: 11pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Page</TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD STYLE="width: 95%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>ABOUT THIS PROSPECTUS SUPPLEMENT</B></FONT></TD>
    <TD STYLE="width: 5%; text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>PROSPECTUS SUPPLEMENT SUMMARY</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>THE OFFERING</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>FEES AND EXPENSES</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>SUPPLEMENTAL RISK FACTORS</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>USE OF PROCEEDS</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>FINANCIAL HIGHLIGHTS</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>PRICE RANGE OF COMMON STOCK</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>PLAN OF DISTRIBUTION</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>LEGAL MATTERS</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: Gainsboro">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>EXPERTS</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>AVAILABLE INFORMATION</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">S-</FONT></TD></TR>
</TABLE>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt"><B>TABLE OF CONTENTS</B></FONT></P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt"><B>&nbsp;</B></FONT></P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt"><B>PROSPECTUS</B></FONT> <FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT> &nbsp; &nbsp;</P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify; width: 95%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>PROSPECTUS SUMMARY</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 5%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Information Regarding the Fund </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The Offering </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Information Regarding the Adviser and Custodian </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Closed-End Fund Structure</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Investment Focus</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Summary Risk Factors and Special Considerations </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>FEES AND EXPENSES</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fee Table </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>FINANCIAL HIGHLIGHTS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>PRICE RANGE OF COMMON STOCK</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share Price Data </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>USE OF PROCEEDS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>INVESTMENT OBJECTIVE AND POLICIES</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Investment Policies - General </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Special Leverage Considerations </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Repurchase Agreements </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Debt Securities </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Securities Lending </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Portfolio Turnover </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Investment Restrictions </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>RISK FACTORS AND SPECIAL CONSIDERATIONS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Risks Related to Offerings Pursuant to this Prospectus </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Discount From Net Asset Value. </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Risks of Investing in Caribbean Basin Countries </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Risks Relating to Equity and Equity-Linked Securities </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Risk Relating to Our Adviser and its Affiliates </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>MANAGEMENT OF THE FUND</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Board of Directors </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Information About Directors and Officers </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Risk Oversight</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Committees of the Board </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ownership of the Fund By Directors </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Director Compensation </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
</TABLE>





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<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify; width: 95%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Investment Adviser and Portfolio Manager </FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 5%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Investment Adviser </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Portfolio Managers </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Investment Advisory Agreement </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Benefit to the Adviser </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rights Offerings </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Expenses of the Fund </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>PORTFOLIO TRANSACTIONS AND BROKERAGE</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">General</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Code of Ethics</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Compliance Policies and Procedures</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Sarbanes-Oxley Act of 2002</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Proxy Voting Policies and Procedures</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>DESCRIPTION OF COMMON STOCK</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share Repurchases and Tender Offers</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Certain Provisions of Articles of Incorporation and Bylaws</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Subscription Rights</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>PLAN OF DISTRIBUTION</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>TAXATION</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Federal Taxation of the Fund and its Distributions </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>DETERMINATION OF NET ASSET VALUE</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>CUSTODIAN, TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND REGISTRAR</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>LEGAL MATTERS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>EXPERTS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>FINANCIAL STATEMENTS</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>AVAILABLE INFORMATION</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>APPENDIX A</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">A-1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>APPENDIX B</B> </FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">B-1</FONT></TD></TR>
</TABLE>





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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 80pt; text-align: center"><B>ABOUT THIS PROSPECTUS SUPPLEMENT</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 80pt; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The Fund has filed with the SEC a registration statement
on Form N-2 (Securities Act File No. 333-202213; Investment Company Act File No. 811-06445) utilizing a shelf registration
process relating to the securities described in this prospectus supplement, which registration statement was declared
effective on [ ]. This document is in two parts. The first part is the prospectus supplement, which describes the terms of
this offering of common stock and also adds to and updates information contained in the accompanying prospectus. The second
part is the accompanying prospectus, which gives more general information and disclosure. To the extent the information
contained in this prospectus supplement differs from or is additional to the information contained in the accompanying
prospectus, you should rely only on the information contained in this prospectus supplement. This prospectus supplement may
add, update or change information contained in the accompanying prospectus. To the extent that any statement we make in this
prospectus supplement is inconsistent with statements made in the accompanying prospectus or any previously filed documents
incorporated by reference herein or therein, the statements made in this prospectus supplement will be deemed to modify or
supersede those made in the accompanying prospectus and such documents incorporated by reference herein and therein. Please
carefully read this prospectus supplement and the accompanying prospectus, including the sections entitled &ldquo;Prospectus
Supplement Summary&mdash;Summary Risk Factors&rdquo; and &ldquo;Supplemental Risk Factors&rdquo; in this prospectus
supplement and &ldquo;Prospectus Summary&mdash;Risk Factors and Special Considerations&rdquo; and &ldquo;Risk Factors and
Special Considerations&rdquo; in the accompanying prospectus, together with the additional information described under the
heading &ldquo;Available Information&rdquo; included in this prospectus before investing in our common stock.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Neither we nor [ ] has authorized any dealer, salesperson,
representative or other person to give any information or to make any representation other than those contained in this prospectus
supplement, if any, or the accompanying prospectus. If anyone provides you with different or inconsistent information, you should
not rely on it. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or a solicitation
of any offer to buy any security other than the registered securities to which they relate, nor do they constitute an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction or to any person to whom it is unlawful to make such
an offer or solicitation in such jurisdiction.</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The information contained in this prospectus supplement and
the accompanying prospectus is accurate as of the dates on their respective covers. Our financial condition, results of operations
and prospects may have changed since those dates. To the extent required by law, we will amend or supplement the information contained
in this prospectus supplement and the accompanying prospectus to reflect any material changes subsequent to the date of this prospectus
supplement and the accompanying prospectus and prior to the completion of any offering pursuant to this prospectus supplement and
the accompanying prospectus.</B></P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS SUPPLEMENT SUMMARY</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left"><I>This
summary highlights some information that is described more fully elsewhere in this prospectus supplement and is qualified in its
entirety by the more detailed information included elsewhere in this prospectus supplement and the accompanying prospectus. This
summary does not purport to be a complete discussion of all matters referred to in this prospectus supplement and may not contain
all of the information that is important to you. For a more complete understanding of the offering of shares of our common stock
pursuant to this prospectus supplement and the accompanying prospectus, we encourage you to read this entire prospectus supplement
and the accompanying prospectus and the documents to which we have referred in this prospectus supplement and the accompanying
prospectus. Together, these documents describe the specific terms of the shares we are offering.</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 4.4pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left"><I>You
should carefully read the sections entitled &ldquo;&mdash;Summary Risk Factors&rdquo; and &ldquo;Supplemental Risk Factors&rdquo;
in this prospectus supplement and &ldquo;Prospectus Summary&mdash;Risk Factors and Special Considerations&rdquo; and &ldquo;Risk
Factors and Special Considerations in the accompanying prospectus, and our financial statements included in our Annual Report
to stockholders for the fiscal year ended June 30, [ ], filed with the SEC on [ ]. References to &ldquo;fiscal year&rdquo; mean
our applicable fiscal year which ends on June 30th in such year.</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 13.85pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Except where the context requires otherwise, the terms the
&ldquo;Fund,&rdquo; &ldquo;we,&rdquo; &ldquo;us&rdquo; and &ldquo;our&rdquo; refer to The Herzfeld Caribbean Basin Fund, Inc. and
the &ldquo;Adviser&rdquo; refers to HERZFELD/CUBA, a division of Thomas J. Herzfeld Advisors, Inc.</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Overview</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">The
Fund is a non-diversified, closed-end management investment company organized under the laws of the State of Maryland that has
registered as an investment company under the 1940 Act. The Fund has elected and intends to continue to qualify annually to be
treated as a regulated investment company under the Internal Revenue Code of 1986, as amended, or the &ldquo;Code.&rdquo;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">Our
investment objective is long-term capital appreciation. To achieve our objective, we invest in issuers that are likely, in the
Adviser&rsquo;s view, to benefit from economic, political, structural and technological developments in the countries in the Caribbean
Basin, which include, among others, Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba,
Haiti, the former Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama,
Colombia, the United States and Venezuela, or the &ldquo;Caribbean Basin Countries.&rdquo; We invest at least 80% of our total
assets in equity and equity-linked securities of issuers, including U.S.-based companies which engage in substantial trade with,
and derive substantial revenue from, operations in the Caribbean Basin Countries. The Fund may invest more than 25% of its total
assets in the securities of U.S.-based companies, which constituted approximately [ ]% of the Fund&rsquo;s total assets as of
[ ]. Total assets includes the amount of any borrowings for investment purposes. At such time as it becomes legally permissible
for U.S. entities to invest directly in Cuba, the Fund will consider such investments. For additional information, see &ldquo;Investment
Objective and Policies&rdquo; in the accompanying prospectus. Equity and equity-linked securities include, but are not limited
to, common stock, preferred stock, debt securities convertible into equity, warrants, options and futures. An investment in the
Fund is not appropriate for all investors and should not constitute a complete investment program. No assurances can be given
that our investment objective will be achieved.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: justify"><B>Distributions</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">We
currently intend to distribute to stockholders, at least annually at such time so as to avoid imposition of excise taxes, substantially
all of our investment company taxable income (i.e., net investment income and any net short-term capital gains less expenses).
Net investment income for this purpose is income other than realized net capital gain (i.e., the extent of net long-term capital
gains over net short-term capital losses). We determine annually whether to distribute any net realized long-term capital gains
in excess of net realized short-term capital losses. Our current policy is to comply with the provisions of the Code, that are
applicable to regulated investment companies and to distribute substantially all our taxable income to our stockholders. Under
these provisions, we are not subject to federal income tax on our taxable income and no federal tax provision is required.</P>





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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">We paid annual distributions to our common stockholders of [
].</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For additional information, see &ldquo;Dividends and Distributions;
Dividend Reinvestment Plan&rdquo; and &ldquo;Taxation&rdquo; in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: justify"><B>Closed-End
Fund Structure</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">The
Fund is a non-diversified, closed-end management investment company under the 1940 Act, commonly referred to as a &ldquo;closed-end
fund.&rdquo; Closed-end management investment companies differ from open-end management investment companies (commonly referred
to as &ldquo;mutual funds&rdquo;) in that closed-end funds generally list their shares for trading on a stock exchange and do
not redeem their stock at the request of the stockholder. This means that if a stockholder wishes to sell shares of a closed-end
management investment company, he or she must trade them on the market, like any other stock, at the prevailing market price at
that time.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 4.4pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">With
respect to a mutual fund, if the stockholder wishes to sell shares of the company, the mutual fund will redeem, or buy back, the
shares at NAV. Mutual funds also generally offer new shares on a continuous basis to new investors, and closed-end management
investment companies generally do not. The continuous inflows and outflows of assets in a mutual fund can make it difficult to
manage the company&rsquo;s investments. By comparison, closed-end management investment companies are generally able to stay more
fully invested in securities that are consistent with their investment objectives and also have greater flexibility to make certain
types of investments and to use certain investment strategies, such as investments in illiquid securities.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">When
shares of closed-end management investment companies are traded, they may trade at a discount to their NAV. This characteristic
of shares of closed- end management investment companies is a risk separate and distinct from the risk that the closed-end management
investment company&rsquo;s NAV may decrease as a result of investment activities. Our conversion to an open-end mutual fund would
require an amendment to the Fund&rsquo;s articles of incorporation.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: justify"><B>Investment
Focus</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">The
Fund&rsquo;s investment objective is to obtain long-term capital appreciation. This objective may not be changed without the prior
approval of the holders of a majority of the Fund&rsquo;s outstanding voting securities. As further described below, the Fund
pursues its objective by investing primarily in equity and equity-linked securities of public and private companies, including
U.S.-based companies, (i) whose securities are traded principally on a stock exchange in a Caribbean Basin Country, (ii) that
have at least 50% of the value of their assets in a Caribbean Basin Country or (iii) that derive at least 50% of their total revenue
from a Caribbean Basin Country, which we refer to collectively as &ldquo;Caribbean Basin Companies.&rdquo; Current income through
receipt of interest or dividends from the Fund&rsquo;s securities is incidental to the Fund&rsquo;s efforts to attain its investment
objective.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.65pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">The
Fund invests in Caribbean Basin Companies that are likely, in the opinion of the Adviser, to benefit from economic, political,
structural and technological developments in the Caribbean Basin Countries. Under normal market conditions, the Fund invests at
least 80% of its total assets in equity and equity-linked securities of Caribbean Basin Companies. This 80% policy may be changed
without stockholder approval upon sixty days written notice to stockholders. Total assets includes the amount of any borrowings
for investment purposes. The Fund may invest more than 25% of its total assets in the securities of U.S.-based companies, which
constituted approximately [ ] of the Fund&rsquo;s total assets as of[ ].</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">Investment
in Cuban securities or any investment in Cuba directly or indirectly is currently prohibited under U.S. law. At such time as it
becomes legally permissible for U.S. entities to invest directly in Cuba, the Fund will consider such investments. U.S. law currently
prohibits the Fund from investing its assets in securities of companies that benefit from free trade with Cuba, which we refer
to as &ldquo;companies strategically linked to Cuba.&rdquo; Companies strategically linked to Cuba may include a company that
benefits from free trade with Cuba, but does not meet the definition of Caribbean Basin Company set forth above. If permitted
to make such investments upon a lifting or easing of the U.S. trade embargo against Cuba or pursuant to regulations promulgated
by a department or agency of the U.S. Government, the Fund may invest up to 20% of its assets in equity and equity-linked securities
of non-Caribbean Basin Companies strategically linked to Cuba.</P>





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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">The
United States re-established diplomatic relations with Cuba and reopened the U.S. embassy in Havana on July 20, 2015.
Additionally, the U.S. Department of the Treasury has implemented certain regulatory changes that may facilitate travel to
Cuba by U.S. trade delegations and by U.S. citizens who engage in certain commercial activities, although the future impact
that these changes may have on travel related to possible investment in Cuba or Cuban securities (if any such investment
activities become legally permissible) is not yet clear. There can be no assurances that the U.S. trade embargo against Cuba
will ever be lifted or eased or, if and when such lifting or easing of the embargo commences, that the Adviser will be able
to identify direct investments in issuers domiciled in Cuba that are acceptable for the Fund. If investment in securities
issued by companies domiciled in Cuba were to be permitted under U.S. law, certain risks and special considerations not
typically associated with investing in securities of U.S. companies would be relevant to such securities. These risks
include, among others, restrictions on foreign investment and on repatriation of capital invested in Cuba, unstable currency
exchange and fluctuation, the absence of a capital market structure or market oriented economy, potential price volatility
and lesser or lack of liquidity of shares listed on a securities market (if one is established), continued political and
economic risks and other risks described in &ldquo;&mdash;Summary Risk Factors&rdquo; in this prospectus supplement and
&ldquo;Prospectus Summary&mdash;Risk Factors and Special Considerations&rdquo; and &ldquo;Risk Factors and
Special Considerations&rdquo; in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.5pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">Equity
securities of public and private companies that may be purchased by the Fund consist of common stock, convertible and non-convertible
preferred stock (whether voting or non-voting), debt with equity warrants and unattached warrants. Debt issued with a warrant
entitles the holder to purchase equity shares and differs from convertible debt because the conversion feature is in the form
of a separately traded warrant. Equity-linked securities of public and private companies that may be purchased by the Fund consist
of debt securities convertible into equity and securities such as warrants, options and futures, the prices of which are functions
of the value of the equity securities receivable upon exercise or settlement thereof.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 8.2pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: justify">We
may invest up to 20% of our assets in non-equity linked debt securities including foreign denominated corporate debt and sovereign
debt issued by foreign governments, their agencies or instrumentalities, or other government-related entities.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">For more information, see &ldquo;Investment Objective and Policies&rdquo;
in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: justify"><B>Investment
Opportunity</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">We
intend to use all or substantially all of the net proceeds from this offering, if any, to acquire investments in accordance with
our investment objective and policies as described in this prospectus supplement and for general corporate purposes. Our Adviser
believes any such net proceeds may permit the Fund to make strategic investments in additional securities of issuers currently
held by us or in other issuers not currently held by us without having to dispose of any securities we hold. Accordingly, we believe
this offering may permit the Adviser to implement the Fund&rsquo;s investment strategy more effectively. In addition to providing
us the ability to invest pursuant to our investment strategy with more flexibility and efficiency, we may achieve certain economies
of scale by spreading our fixed costs over a larger asset base, thereby reducing the Fund&rsquo;s expense ratio per share. See
also &ldquo;Use of Proceeds&rdquo; in this prospectus supplement.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 19.85pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: justify"><B>Summary
Risk Factors</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: left">The
value of our assets, as well as the market price of our securities, will fluctuate. Our investments may be risky, and you may
lose all or part of your investment in us. The Fund is a non-diversified, closed-end investment company designed primarily as
a long-term investment and not as a trading tool. The Fund invests generally in a portfolio of Caribbean Basin Companies. An investment
in the Fund should be considered speculative and involves a high degree of risk. The Fund&rsquo;s shares do not represent a deposit
or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any governmental agency.</P>





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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">Risks that you should carefully consider before investing in
our common stock include, but are not limited to, the following:</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 10.65pt">Investing in the securities of Caribbean Basin Companies involves certain risks and considerations
not typically associated with investing in securities of U.S. issuers, including, but not limited to, currency fluctuations, political
and economic risks, limited liquidity, high inflation and monetary repatriation restrictions.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="text-align: justify; padding-right: 3.4pt">Equity securities in which we invest are sensitive to general movements in
the stock market, may experience a decline in value due to adverse events affecting the issuer of such securities and, in the event
of liquidation or bankruptcy of the issuer, would generally have a lower priority with respect to any distribution of the assets
of the issuer than holders of other classes of securities or creditors.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 15.65pt">Equity-linked securities are subject to market risk and other risks of the referenced equity
security, risks related to the market prices for debt securities and counterparty risk, among other risks.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 8.4pt">Investment in Cuban securities or any investment in Cuba directly or indirectly is currently prohibited
under U.S. law; if investment in securities issued by companies domiciled in Cuba were to be permitted under U.S. law, certain
risks and special considerations not typically associated with investing in securities of U.S. companies would be relevant to those
securities.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>As a &ldquo;non-diversified&rdquo; investment company, the Fund&rsquo;s investments involve greater risks than would be the
case for a similar diversified investment company.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 29pt">The Adviser&rsquo;s judgment about the attractiveness, relative value or potential appreciation
of a particular security or investment strategy may prove to be incorrect.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>We may not distribute to stockholders any net realized long-term capital gains in excess of net realized short-term capital
losses.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 6.2pt">A stockholder&rsquo;s economic and/or voting interest in the Fund may be diluted if we issue additional
shares of common stock in this offering or in any subsequent offering.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 10.65pt">Certain provisions in our articles of incorporation, as amended, and our bylaws could deter
takeover attempts and have an adverse impact on the price of our common stock.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 11.75pt">Certain local or global events have had, and may in the future have, a disruptive effect on
the securities markets, including the market on which our common stock is traded.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 13.55pt">The NAV of our common stock may fluctuate significantly, and the NAV and liquidity of the market
for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may
not be directly related to our operating performance.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>Under the 1940 Act, we generally are prohibited from issuing or selling our common stock at a price below NAV per share.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 6.75pt">Securities traded in foreign markets have often (though not always) performed differently from
securities traded in the United States and often involve special risks not present in U.S. investments that can increase the chances
that we will lose money.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 6.2pt">We may invest from time to time a substantial amount of our assets in issuers located in a single
country or a limited number of countries, which may increase the risk and/or volatility of our investment performance.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 8.4pt">Changes in foreign currency exchange rates may affect the value of our portfolio as securities
and other instruments in which we invest may be denominated or quoted in currencies other than the U.S. dollar.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 3.4pt">The risks associated with investments in emerging markets, including many Caribbean Basin Countries
in which we invest, are usually much greater than those associated with other foreign or U.S. markets.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 7.85pt">Certain actual or potential conflicts of interest and risks may arise in connection with the
Adviser, including conflicts of interest caused by compensation arrangements, competition for the time and resources of the Adviser,
conflicts of interest in connection with the management of the Fund&rsquo;s business affairs, conflicts of interest with the Adviser&rsquo;s
management of other accounts, risk due to the Adviser&rsquo;s actions on behalf of its other accounts and clients, risk due to
inside information and risk in transactions with affiliates.</TD></TR></TABLE>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>Shares of our common stock may trade at a market price that is less than the NAV attributable to those shares.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>Sales of our common stock in this offering, or the perception that such sales may occur, may cause the market price of our
common stock to decline.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>We may allocate the net proceeds, if any, from this offering in ways with which you may not agree or which may not enhance
stockholder value.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>We may be unable to invest a portion of the net proceeds, if any, from this offering in a timely manner.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0pt; text-indent: 0pt; text-align: justify">The
risks and special considerations discussed above apply generally to the investments and strategies that the Adviser will use under
normal market conditions. The Fund and the Adviser also may use other strategies and engage in other investment practices. Additional
information about these investment strategies and practices and related risks is provided in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">For more information about the risks described
above and other risks, see &ldquo;Supplemental Risk Factors&rdquo; in this prospectus supplement and &ldquo;Prospectus Summary&mdash;Risk
Factors and Special Considerations&rdquo; and &ldquo;Risk Factors and Special Considerations&rdquo; in the accompanying prospectus.
In addition, the other information included in this prospectus supplement and the accompanying prospectus contains a discussion
of factors you should carefully consider before deciding to invest in shares of our common stock.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><B>Corporate Information</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 7.8pt 0pt 0pt">We were incorporated in the State of Maryland
on March 10, 1992 and completed our initial public offering in 1993. We are a non-diversified closed-end management investment
company that has registered as an investment company under the 1940 Act. Our offices are located at 119 Washington Avenue, Suite
504 Miami Beach, FL 33139, and our telephone number is (800) TJH-FUND (toll-free) or (305) 271-1900. Our website address is <I>http://herzfeld.com/cuba</I>.
The inclusion of our website address above and elsewhere in this prospectus supplement and the accompanying prospectus is, in each
case, intended to be an inactive textual reference only and not an active hyperlink to our website. The information contained in,
or that can be accessed through, our website is not part of this prospectus supplement or the accompanying prospectus.</P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>T</B>H<B>E OFFERING&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>



<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 38%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid"><FONT STYLE="font-size: 11pt">Common stock offered by us</FONT></TD>
    <TD STYLE="width: 62%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">Shares of our common stock having an aggregate offering price
        of up to $[ ].</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">Common stock outstanding prior to this offering</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[ ] shares.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid"><FONT STYLE="font-size: 11pt">Manner of offering</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[ ] See &ldquo;Plan of Distribution.&rdquo;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid"><FONT STYLE="font-size: 11pt">Use of Proceeds</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0pt">We intend to
use all or substantially all of the net proceeds from this offering, if any, for acquiring investments in accordance with our
investment objective and policies described in this prospectus supplement and for general corporate purposes. The Adviser anticipates
that such proceeds, if received, will be invested promptly as investment opportunities are identified, depending on market conditions
and the availability of appropriate securities, which we anticipate will take not more than approximately three to six months
from the time of any sales made under this offering. Pending investment, the proceeds will be invested in short-term cash-equivalent
instruments. Although the Adviser anticipates that all of the proceeds from this offering will be invested pursuant to our investment
objective and policies, some of the proceeds may be used to make capital gain distributions required to maintain our tax status
as a regulated investment company. See &ldquo;Use of Proceeds&rdquo; in this prospectus supplement.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -179.6pt"></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid"><FONT STYLE="font-size: 11pt">Distributions</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">We distribute annually to our stockholders substantially all
        of our net investment income and net short-term capital gains, if any. We determine annually whether to distribute any net realized
        long-term capital gains in excess of net realized short-term capital losses. See &ldquo;Prospectus Supplement Summary&mdash;Distributions&rdquo;
        in this prospectus supplement and &ldquo;Dividends and Distributions; Dividend Reinvestment Plan&rdquo; and &ldquo;Taxation&rdquo;
        in the accompanying prospectus.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">NASDAQ Capital Market symbol of common stock</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">&ldquo;CUBA&rdquo;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid"><FONT STYLE="font-size: 11pt">Risk Factors</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">An investment in our common stock is subject to risks and involves
        a heightened risk of total loss of investment. In addition, the companies in which we invest are subject to special risks. See
        &ldquo;Prospectus Supplement Summary&mdash;Summary Risk Factors&rdquo; and &ldquo;Supplemental Risk Factors&rdquo; in this prospectus
        supplement and &ldquo;Prospectus Summary&mdash;Risk Factors and Special Considerations&rdquo; and &ldquo;Risk Factors and Special
        Considerations&rdquo; in the accompanying prospectus to read about factors you should carefully consider before investing in our
        common stock.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD></TR>
</TABLE>



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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FEES AND EXPENSES </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The following table is intended to assist you in understanding
the costs and expenses that you will bear directly or indirectly. We caution you that some of the percentages indicated in the
table below are estimates and may vary. Except where the context suggests otherwise, whenever this prospectus supplement and the
accompanying prospectus contains a reference to fees or expenses paid by &ldquo;us&rdquo; or the Fund or that &ldquo;we&rdquo;
will pay fees or expenses, you will indirectly bear such fees or expenses as an investor in the Fund.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; width: 85%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Fee Table</B></FONT></TD>
    <TD STYLE="white-space: nowrap; width: 15%; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; text-align: justify">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt"><I>Stockholder Transaction Expenses:</I></FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Sales load (as a percentage of the offering price)(1) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Offering expenses borne by us (as a percentage of offering price) (2) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Dividend reinvestment plan fees </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">None</FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD COLSPAN="2" STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-size: 11pt">Total stockholder transaction expenses (as a percentage of offering price).</FONT></TD>
    </TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; text-align: justify; width: 85%"><FONT STYLE="font-size: 11pt"><I>Annual Expenses (as a percentage of net assets attributable to common shares):</I></FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center; width: 15%">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Management Fees </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Other expenses (3)(estimated) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Acquired fund fees and expenses(4) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; padding-left: 20pt; text-align: justify"><FONT STYLE="font-size: 11pt">Total Annual Expenses (estimated) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">(1)</TD><TD STYLE="text-align: justify">The actual amounts in connection with any offering will be set forth in the prospectus supplement
if applicable.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">(2)</TD><TD STYLE="text-align: justify">The offering expenses of this offering are estimated to be approximately $[ ]</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">(3)</TD><TD STYLE="text-align: justify">&ldquo;Other expenses&rdquo; are for the current fiscal year after giving effect to anticipated
net proceeds of the offering, assuming that we incur the estimated offering expenses. These expenses will be borne by the holders
of the shares of Common Stock of the Fund and result in a reduction in the NAV of the shares of Common Stock.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">(4)</TD><TD STYLE="text-align: justify">Include fees and expenses of approximately [ ]% incurred indirectly as a result of investment in
shares of one or more &ldquo;Acquired Funds,&rdquo; which include (i) investment companies, or (ii) companies that would be an
investment company under Section 3(a) of the 1940 Act except for exceptions under Sections 3(c)(1) and 3(c)(7) under the 1940 Act.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 20pt; text-indent: 0pt; text-align: justify"><B>Example</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The following example demonstrates the projected dollar amount
of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common
stock. In calculating the following expense amounts, we have assumed that our annual operating expenses would remain at the levels
set forth in the table above, and that we pay the transaction expenses set forth in the table above, including a sales load of
2.0% paid by you (the commission to be paid by us with respect to common stock sold by us in this offering).</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Cumulative Expenses Paid for the Period of:</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">1 year</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">3 years</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">5 years</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">10 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 11pt">An investor would pay the following expenses on a $1,000
    investment, assuming a 5% annual return: </FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$[ &nbsp;&nbsp;]</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$[ &nbsp;&nbsp;]</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$[&nbsp;&nbsp; ]</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$[ &nbsp;&nbsp;]</FONT></TD></TR>
</TABLE>



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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="color: #070707"><B>The example and the expenses
in the tables above should not be considered a representation of past or future expenses or annual rates of return and actual expenses
or annual rates of return may be more or less than those shown.</B></FONT> The foregoing table and example are intended to assist
investors in understanding the costs and expenses that an investor in the Fund will bear directly or indirectly. &ldquo;Other Expenses&rdquo;
are based on estimated amounts for the current fiscal year. See &ldquo;Management of the Fund&rdquo; in the accompanying prospectus
for additional information.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The example assumes the reinvestment of all dividends and distributions
at NAV and an expense ratio of [&nbsp;&nbsp; ]%. The tables above and the assumption in the example of a 5% annual return are required by SEC
regulations applicable to all investment companies. In addition, while the example assumes the reinvestment of all dividends and
distributions at NAV, participants in the Dividend Reinvestment Plan may receive shares purchased or issued at a price or value
different from NAV. See &ldquo;Dividends and Distributions; Dividend Reinvestment Plan&rdquo; in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SUPPLEMENTAL RISK FACTORS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Investing in our securities involves a number of significant
risks. Before you invest in our securities, you should be aware of various risks, including those described below and those set
forth elsewhere in this prospectus supplement and in the accompanying prospectus. You should carefully consider these risk factors,
together with all of the other information included in this prospectus supplement and the accompanying prospectus, before you decide
whether to make an investment in our securities. The risks set out below are not the only risks we face. Additional risks and uncertainties
not presently known to us or not presently deemed material by us may also impair our operations and performance. If any of the
following events occur, our business, financial condition, and results of operations could be materially and adversely affected.
In such case, our NAV and the trading price of our securities could decline, and you may lose all or part of your investment.</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to This Offering</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt"><I>Issuances of Our Common Stock.</I> Sales
of our common stock in this offering, or the perception that such sales may occur, could cause the market price of our common stock
to fall. We may issue and sell shares of our common stock for aggregate gross proceeds of up to $[ ] [from time to time] in connection
with this offering. The issuance and sale [from time to time] of these new shares of common stock, or the perception that such
sales may occur, could have the effect of depressing the market price of our common stock or could impair our ability to raise
capital through a future sale of our equity securities.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt"><I>Allocation of Net Proceeds.</I> We may
allocate any net proceeds from this offering in ways with which you may not agree. We have significant flexibility in investing
the net proceeds of this offering and may use the net proceeds from this offering in ways with which you may not agree or for purposes
other than those intended at the time of this offering. You will not have the opportunity, as part of your investment decision,
to assess whether the proceeds are being used appropriately. If we do not invest or apply any net proceeds from this offering in
ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause the market price of our
common stock to decline.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt"><I>Time Necessary to Invest.</I> Delays
in investing the net proceeds, if any, raised in this offering could harm our financial condition and operating results. Depending
on market conditions and the availability of appropriate securities, we anticipate it will take not more than approximately three
to six months from the time of any sales made under this offering to invest the net proceeds of any such sales in investments
meeting our investment objective. Pending investment, the proceeds will be invested in short-term cash-equivalent instruments.
These investments may earn yields substantially lower than the income that we would anticipate receiving if all or substantially
all of the net proceeds of any sales under this offering are invested in accordance with our investment objective. However, we
cannot assure you that we will be able to identify any investments that meet our investment objective or that any investment that
we make will produce a positive return. We may be unable to invest the net proceeds of this offering, if any, on acceptable terms
within the time period that we anticipate or at all, which could harm our financial condition and operating results.</P>





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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>USE OF PROCEEDS </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">We estimate the net proceeds of the offering to be $[&nbsp;&nbsp; ] ($[&nbsp;&nbsp;
] if the over-allotment options is exercised in full) based on the public offering price of $[&nbsp;&nbsp; ] per share and after deducting
underwriting discounts and commissions and estimated offering expenses payable by us.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">Unless otherwise specified in the prospectus supplement, we
intend to use all or substantially all of the net proceeds from a sale of our securities pursuant to this prospectus supplement,
if any, for acquiring investments in accordance with our investment objective and policies described in this prospectus supplement
and for general corporate purposes. The Adviser anticipates that such proceeds, if received, will be invested promptly as investment
opportunities are identified, depending on market conditions and the availability of appropriate securities, which we anticipate
will take not more than approximately three to six months from the closing of any offering. Pending investment, the proceeds will
be invested in short-term cash-equivalent instruments. Although the Adviser anticipates that a substantial portion of the proceeds
from any offering will be invested pursuant to the Fund&rsquo;s investment objective and policies, some of the proceeds may be
used to make capital gain distributions required to maintain the Fund&rsquo;s tax status as a regulated investment company.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FINANCIAL HIGHLIGHTS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The table below sets forth selected data for a share of common
stock outstanding for each period presented. The information for the fiscal years ended June 30, [&nbsp;&nbsp; ] and Jund 30, [ &nbsp;&nbsp;] have been
audited by [&nbsp;&nbsp; ], the Fund&rsquo;s independent registered public accounting firm. The information for the fiscal years ended June
30, [&nbsp;&nbsp; ] contained in the table was audited by the Fund&rsquo;s former independent registered public accounting firm. Audited financial
statements for the Fund for the fiscal year ended June 30, [&nbsp;&nbsp; ], are included in the Annual Report to stockholders. The Annual Report
to stockholders is available without charge by calling (800) TJH-FUND.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[To be provided.]</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PRICE RANGE OF COMMON STOCK</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth, for the periods indicated, the
high and low sales prices for the shares on the NASDAQ Capital Market, the NAVs per share on the dates of the high and low sales
prices, and the discount or premium that each sales price represented as a percentage of the preceding NAV:</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Share Price Data </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="text-align: center; vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; width: 13%"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Quarter</B></FONT></P>
                                                                          <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>&nbsp;Ended</B></FONT></P></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; width: 13%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>High
    </B></FONT></TD>
    <TD NOWRAP STYLE="width: 2%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; width: 13%"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>NAV</B></FONT></P>
                                                                          <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">&nbsp;<B>(on
                                         High Date)</B></FONT></P></TD>
    <TD NOWRAP STYLE="width: 2%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; width: 13%"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Premium/</B></FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>(Discount)</B></FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>(on High Date)</B></FONT></P></TD>
    <TD NOWRAP STYLE="width: 2%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; width: 12%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Low
    </B></FONT></TD>
    <TD NOWRAP STYLE="width: 2%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; width: 12%"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>NAV</B></FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>(on Low Date)</B></FONT></P></TD>
    <TD NOWRAP STYLE="width: 2%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; width: 12%"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Premium/</B></FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>(Discount)</B></FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>(on Low Date)</B></FONT></P></TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[To be provided.]</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PLAN OF DISTRIBUTION </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[To be provided.]</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEGAL MATTERS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pepper Hamilton LLP, 3000 Two Logan Square,
18<SUP>th</SUP> and Arch Streets, Philadelphia, PA 19103 serves as counsel to the Fund.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXPERTS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The independent registered accounting firm of the Fund is [&nbsp;&nbsp;
], located at [&nbsp;&nbsp; ]. As the independent registered public accounting firm of the Fund, [&nbsp;&nbsp; ] is an expert in accounting and auditing
and audited the Fund&rsquo;s financial statements included in the Fund&rsquo;s Annual Report to Stockholders for the fiscal year
ended [&nbsp;&nbsp; ] (the &ldquo;Annual Report&rdquo;).</P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AVAILABLE INFORMATION</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">We have filed with the SEC a registration statement on Form
N-2 together with amendments and related exhibits under the Securities Act. The registration statement contains additional information
about us and the securities being offered by this prospectus supplement and the accompanying prospectus. We are also required to
file with or submit to the SEC annual, semi-annual and quarterly reports, proxy statements and other information about us. You
may request copies of these reports and filings, including this prospectus supplement and accompanying prospectus, free of charge,
make inquiries or request other information about us by contacting us by mail at 119 Washington Avenue, Suite 504 Miami Beach,
FL 33139, or by telephone at (800) TJH-FUND (toll-free) or (305) 271-1900. Copies of these reports and filings are also available
free of charge through our website at <I>http://herzfeld.com/cuba</I>. The inclusion of our website address above and elsewhere
in this prospectus supplement is, in each case, intended to be an inactive textual reference only and not an active hyperlink to
our website. The information contained in, or that can be accessed through, our website is not part of this prospectus supplement.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt">You may also inspect and copy these reports,
proxy statements and other information, as well as the registration statement and related exhibits and schedules, at the SEC&rsquo;s
Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room may
be obtained by calling the SEC at (202) 551-8090 or toll free at 1 (800) SEC-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements and other information filed electronically by us with the SEC which are available on
the SEC&rsquo;s website at <I>http://www.sec.gov.</I> Copies of these reports, proxy and information statements and other information
may also be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov,
or by writing to the SEC&rsquo;s Public Reference Section, Washington, D.C. 20549.</P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="fp0033212_03.jpg" ALT="(GRAPHIC)" STYLE="width: 80px; height: 69px">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; color: #C10000"><B>The information in this prospectus is not
complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer and sale is not permitted.</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; color: #C10000">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>[FORM OF PROSPECTUS SUPPLEMENT] </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(To Prospectus dated [&nbsp;&nbsp; ], 2018) </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[&nbsp;&nbsp; ] Rights for [&nbsp;&nbsp; ] Shares </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Subscription Rights for Common Stock
</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The Herzfeld Caribbean Basin Fund, Inc. (the &ldquo;Fund&rdquo;,
&ldquo;we&rdquo;, &ldquo;us&rdquo; or &ldquo;our&rdquo;) is issuing subscription rights (the &ldquo;Rights&rdquo;) to our common
stockholders to purchase additional shares of common stock.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The Herzfeld Caribbean Basin Fund, Inc. (the &ldquo;Fund&rdquo;)
is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, or the &ldquo;1940
Act&rdquo;. The Fund&rsquo;s investment adviser is HERZFELD/CUBA, a division of Thomas J. Herzfeld Advisors, Inc., or the &ldquo;Adviser&rdquo;.
The Fund&rsquo;s investment objective is long-term capital appreciation. To achieve its objective, the Fund invests in issuers
that are likely, in the Adviser&rsquo;s view, to benefit from economic, political, structural and technological developments in
the countries in the Caribbean Basin, which include, among others, Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican
Republic, Barbados, Aruba, Haiti, the former Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala,
Belize, Costa Rica, Panama, Colombia, the United States and Venezuela, or the &ldquo;Caribbean Basin Countries&rdquo;. The Fund
invests at least 80% of its total assets in a broad range of securities of issuers, including U.S.-based companies which engage
in substantial trade with, and derive substantial revenue from, operations in the Caribbean Basin Countries. The Fund may invest
more than 25% of its total assets in the securities of U.S.-based companies, which constituted approximately [ ]% of the Fund&rsquo;s
total assets as of [ ]. Total assets includes the amount of any borrowings for investment purposes. At such time as it becomes
legally permissible for U.S. entities to invest directly in Cuba, the Fund will consider such investments. For additional information,
see &ldquo;Investment Objective and Policies&rdquo; in the accompanying prospectus. Equity and equity-linked securities include,
but are not limited to, common stock, preferred stock, debt securities convertible into equity, warrants, options and futures.
An investment in the Fund is not appropriate for all investors and should not constitute a complete investment program. No assurances
can be given that the Fund&rsquo;s objective will be achieved.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.5pt 0pt 0pt">Our common stock is traded on the NASDAQ Capital
Market under the symbol &ldquo;CUBA.&rdquo; On [ &nbsp;&nbsp;], 2018, the last reported sales price on the NASDAQ Capital Market for our common
stock was $[ &nbsp;&nbsp;] per share. We determine the NAV per share of our common stock no less frequently than monthly. Our NAV per share
of our common stock as of [ &nbsp;&nbsp;], 2018 was $[ &nbsp;&nbsp;] (unaudited) and our total net assets were $[ &nbsp;&nbsp;] (unaudited). As of [&nbsp;&nbsp; ], 2018, there
were [&nbsp;&nbsp; ] shares of our common stock outstanding.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.5pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Neither the Securities and Exchange
Commission (&ldquo;SEC&rdquo;) nor any state securities commission has approved or disapproved these securities or determined if
the accompanying prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal
offense.</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>You should rely only on the information contained or incorporated
by reference in this prospectus supplement and the accompanying prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We
are not making an offer to sell these securities in any jurisdiction in which the offer or sale is not permitted. </B></P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">Please carefully read this prospectus supplement and the accompanying
prospectus before investing in our common stock and keep each for future reference. This prospectus supplement and the accompanying
prospectus set forth concisely important information about us that a prospective investor ought to know before investing in our
securities. The Fund is required to file with or submit to the U.S. Securities and Exchange Commission, or &ldquo;SEC,&rdquo; annual,
semi-annual and quarterly reports, proxy statements and other information about us. You may request copies of these reports and
filings, including this prospectus supplement and accompanying prospectus, free of charge, make inquiries or request other information
about us by contacting us by mail at 119 Washington Avenue, Suite 504 Miami Beach, FL 33139 or by telephone at (800) TJH-FUND (toll-free)
or (305) 271-1900. Copies of these reports and filings are also available free of charge through our website at <I>http://herzfeld.com/cuba</I>.
The SEC also maintains a website at <I>http://www.sec.gov </I>that contains this information. The inclusion of our website address
above and</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">elsewhere in this prospectus supplement
and the accompanying prospectus is, in each case, intended to be an inactive textual reference only and not an active hyperlink
to our website. The information contained in, or that can be accessed through, our website is not part of this prospectus supplement
or the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Investing in common stock through Rights should be considered
speculative and involves a high degree of risk, including the risk of a total loss of investment. Shares of closed-end investment
companies frequently trade at a discount to their net asset value. See &ldquo;Prospectus Supplement Summary&mdash;Summary Risk
Factors&rdquo; beginning on page R-</B>[ ] <B>of this prospectus supplement, &ldquo;Supplemental Risk Factors&rdquo; beginning
on page R</B>[ ] <B>of this prospectus supplement, &ldquo;Prospectus Summary&mdash;Risk Factors and Special Considerations&rdquo;
beginning on page </B>[ ] <B>of the accompanying prospectus and &ldquo;Risk Factors and Special Considerations&rdquo; beginning
on page </B>[ ] <B>of the accompanying prospectus to read about the risks you should carefully consider before investing in our
common stock.</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>STOCKHOLDERS WHO DO NOT EXERCISE THEIR RIGHTS MAY, AT THE
COMPLETION OF THE OFFERING, OWN A SMALLER PROPORTIONAL INTEREST IN THE FUND THAN IF THEY EXERCISED THEIR RIGHTS. AS A RESULT OF
THE OFFERING YOU MAY EXPERIENCE DILUTION OR ACCRETION OF THE AGGREGATE NET ASSET VALUE OF YOUR SHARES OF COMMON STOCK DEPENDING
UPON WHETHER THE FUND&rsquo;S NET ASSET VALUE PER SHARE OF COMMON STOCK IS ABOVE OR BELOW THE SUBSCRIPTION PRICE ON THE EXPIRATION
DATE. </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Per Share</B></FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Total</B></FONT></TD>
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt; width: 71%"><FONT STYLE="font-size: 11pt">Subscription price of Common Stock to shareholders exercising Rights</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: right; width: 12%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: right; width: 12%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt">Underwriting discounts and commissions</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 11pt">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt"><FONT STYLE="font-size: 11pt">] </FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 11pt">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">] </FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt">Proceeds, before expenses, to the Fund (1)</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20pt; border-top: Black 1pt solid"><FONT STYLE="font-size: 11pt">(1)</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid"><FONT STYLE="font-size: 11pt">The aggregate expenses of the offering are estimated to be $[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]. </FONT></TD></TR>
</TABLE>



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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TABLE
OF CONTENTS </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS SUPPLEMENT </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 11pt">Page</FONT></TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>ABOUT THIS PROSPECTUS SUPPLEMENT</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>PROSPECTUS SUPPLEMENT SUMMARY</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>SUMMARY OF THE TERMS OF THE RIGHTS OFFERING</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>DESCRIPTION OF THE RIGHTS OFFERING</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>FEES AND EXPENSES</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>SUPPLEMENTAL RISK FACTORS</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>USE OF PROCEEDS</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>FINANCIAL HIGHLIGHTS</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>CAPITALIZATION</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>PRICE RANGE OF COMMON STOCK</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>LEGAL MATTERS</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-size: 11pt">R-</FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>EXPERTS</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><FONT STYLE="font-size: 11pt"><B>AVAILABLE INFORMATION</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; text-align: left">&nbsp;</TD>
    </TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt"><B>TABLE OF CONTENTS</B></FONT></P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt"><B>&nbsp;</B></FONT></P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 11pt"><B>PROSPECTUS</B></FONT> <FONT STYLE="font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp; &nbsp; &nbsp;</P>

<P STYLE="text-align: center; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify; width: 95%"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>PROSPECTUS SUMMARY</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 5%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Information Regarding the Fund</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">The Offering</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Information Regarding the Adviser and Custodian</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Closed-End Fund Structure</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Investment Focus</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Summary Risk Factors and Special Considerations</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>FEES AND EXPENSES</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Fee Table</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>FINANCIAL HIGHLIGHTS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>PRICE RANGE OF COMMON STOCK</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Share Price Data</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>USE OF PROCEEDS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>INVESTMENT OBJECTIVE AND POLICIES</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Investment Policies - General</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Special Leverage Considerations</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Repurchase Agreements</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Debt Securities</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Securities Lending</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Portfolio Turnover</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Investment Restrictions</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>RISK FACTORS AND SPECIAL CONSIDERATIONS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Risks Related to Offerings Pursuant to this Prospectus</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Discount From Net Asset Value</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Risks of Investing in Caribbean Basin Countries</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Risks Relating to Equity and Equity-Linked Securities</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Risk Relating to Our Adviser and its Affiliates</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>MANAGEMENT OF THE FUND</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Board of Directors</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
</TABLE>




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<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Information About Directors and Officers</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Risk Oversight</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Committees of the Board</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Ownership of the Fund By Directors</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Director Compensation</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Investment Adviser and Portfolio Manager</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Investment Adviser</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 40pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Portfolio Managers</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Investment Advisory Agreement</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Benefit to the Adviser</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Rights Offerings</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Expenses of the Fund</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>PORTFOLIO TRANSACTIONS AND BROKERAGE</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">General</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Code of Ethics</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Compliance Policies and Procedures</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Sarbanes-Oxley Act of 2002</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Proxy Voting Policies and Procedures</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>DESCRIPTION OF COMMON STOCK</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Share Repurchases and Tender Offers</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Certain Provisions of Articles of Incorporation and Bylaws</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Subscription Rights</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>PLAN OF DISTRIBUTION</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>TAXATION</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">Federal Taxation of the Fund and its Distributions</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>DETERMINATION OF NET ASSET VALUE</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>CUSTODIAN, TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND REGISTRAR</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>LEGAL MATTERS</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>EXPERTS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>FINANCIAL STATEMENTS</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>AVAILABLE INFORMATION</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>APPENDIX A</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">A-1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>APPENDIX B</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: right"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">B-1</FONT></TD></TR>
</TABLE>









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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 80pt; text-align: center"><B>ABOUT THIS PROSPECTUS SUPPLEMENT</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 80pt; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The Fund has filed with the SEC a registration statement
on Form N-2 (Securities Act File No. 333-202213; Investment Company Act File No. 811-06445) utilizing a shelf registration
process relating to the securities described in this prospectus supplement, which registration statement was declared
effective on [ ]. This document is in two parts. The first part is the prospectus supplement, which describes the terms of
this offering of common stock and also adds to and updates information contained in the accompanying prospectus. The second
part is the accompanying prospectus, which gives more general information and disclosure. To the extent the information
contained in this prospectus supplement differs from or is additional to the information contained in the accompanying
prospectus, you should rely only on the information contained in this prospectus supplement. This prospectus supplement may
add, update or change information contained in the accompanying prospectus. To the extent that any statement we make in this
prospectus supplement is inconsistent with statements made in the accompanying prospectus or any previously filed documents
incorporated by reference herein or therein, the statements made in this prospectus supplement will be deemed to modify or
supersede those made in the accompanying prospectus and such documents incorporated by reference herein and therein. Please
carefully read this prospectus supplement and the accompanying prospectus, including the sections entitled &ldquo;Prospectus
Supplement Summary&mdash;Summary Risk Factors&rdquo; and &ldquo;Supplemental Risk Factors&rdquo; in this prospectus
supplement and &ldquo;Prospectus Summary&mdash;Risk Factors and Special Considerations&rdquo; and &ldquo;Risk Factors and
Special Considerations&rdquo; in the accompanying prospectus, together with the additional information described under the
heading &ldquo;Available Information&rdquo; included in this prospectus before investing in our common stock.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Neither we nor</B> [&nbsp;&nbsp; ] <B>has authorized any dealer, salesperson,
representative or other person to give any information or to make any representation other than those contained in this prospectus
supplement, if any, or the accompanying prospectus. If anyone provides you with different or inconsistent information, you should
not rely on it. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or a solicitation
of any offer to buy any security other than the registered securities to which they relate, nor do they constitute an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction or to any person to whom it is unlawful to make such
an offer or solicitation in such jurisdiction.</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The information contained in this prospectus supplement and
the accompanying prospectus is accurate as of the dates on their respective covers. Our financial condition, results of operations
and prospects may have changed since those dates. To the extent required by law, we will amend or supplement the information contained
in this prospectus supplement and the accompanying prospectus to reflect any material changes subsequent to the date of this prospectus
supplement and the accompanying prospectus and prior to the completion of any offering pursuant to this prospectus supplement and
the accompanying prospectus.</B></P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS SUPPLEMENT SUMMARY</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 4.4pt 0pt 0pt"><I>This summary highlights some information that
is described more fully elsewhere in this prospectus supplement and is qualified in its entirety by the more detailed information
included elsewhere in this prospectus supplement and the accompanying prospectus. This summary does not purport to be a complete
discussion of all matters referred to in this prospectus supplement and may not contain all of the information that is important
to you. For a more complete understanding of the offering of shares of our common stock pursuant to this prospectus supplement
and the accompanying prospectus, we encourage you to read this entire prospectus supplement and the accompanying prospectus and
the documents to which we have referred in this prospectus supplement and the accompanying prospectus. Together, these documents
describe the specific terms of the shares we are offering.</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 4.4pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 13.85pt 0pt 0pt"><I>You should carefully read the sections entitled
&ldquo;&mdash;Summary Risk Factors&rdquo; and &ldquo;Supplemental Risk Factors&rdquo; in this prospectus supplement and &ldquo;Prospectus
Summary&mdash;Risk Factors and Special Considerations&rdquo; and &ldquo;Risk Factors and Special Considerations in the accompanying
prospectus, and our financial statements included in our Annual Report to stockholders for the fiscal year ended June 30,</I> [
&nbsp;&nbsp;]<I>, filed with the SEC on</I> [&nbsp;&nbsp; ]<I>. References to &ldquo;fiscal year&rdquo; mean our applicable fiscal year which ends on June
30th in such year.</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 13.85pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Except where the context requires otherwise, the terms the
&ldquo;Fund,&rdquo; &ldquo;we,&rdquo; &ldquo;us&rdquo; and &ldquo;our&rdquo; refer to The Herzfeld Caribbean Basin Fund, Inc. and
the &ldquo;Adviser&rdquo; refers to HERZFELD/CUBA, a division of Thomas J. Herzfeld Advisors, Inc.</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Overview</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0pt">The Fund is a non-diversified, closed-end management
investment company organized under the laws of the State of Maryland that has registered as an investment company under the 1940
Act. The Fund has elected and intends to continue to qualify annually to be treated as a regulated investment company under the
Internal Revenue Code of 1986, as amended, or the &ldquo;Code.&rdquo;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">Our investment objective is long-term capital
appreciation. To achieve our objective, we invest in issuers that are likely, in the Adviser&rsquo;s view, to benefit from economic,
political, structural and technological developments in the countries in the Caribbean Basin, which include, among others, Cuba,
Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba, Haiti, the former Netherlands Antilles, the
Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia, the United States and Venezuela,
or the &ldquo;Caribbean Basin Countries.&rdquo; We invest at least 80% of our total assets in equity and equity-linked securities
of issuers, including U.S.-based companies which engage in substantial trade with, and derive substantial revenue from, operations
in the Caribbean Basin Countries. The Fund may invest more than 25% of its total assets in the securities of U.S.-based companies,
which constituted approximately [&nbsp;&nbsp; ]% of the Fund&rsquo;s total assets as of [ &nbsp;&nbsp;]. Total assets includes the amount of any borrowings
for investment purposes. At such time as it becomes legally permissible for U.S. entities to invest directly in Cuba, the Fund
will consider such investments. For additional information, see &ldquo;Investment Objective and Policies&rdquo; in the accompanying
prospectus. Equity and equity-linked securities include, but are not limited to, common stock, preferred stock, debt securities
convertible into equity, warrants, options and futures. An investment in the Fund is not appropriate for all investors and should
not constitute a complete investment program. No assurances can be given that our investment objective will be achieved.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><B>Distributions</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 6.65pt 0pt 0pt">We currently intend to distribute to stockholders,
at least annually at such time so as to avoid imposition of excise taxes, substantially all of our investment company taxable income
(i.e., net investment income and any net short-term capital gains less expenses). Net investment income for this purpose is income
other than realized net capital gain (i.e., the extent of net long-term capital gains over net short-term capital losses). We determine
annually whether to distribute any net realized long-term capital gains in excess of net realized short-term capital losses. Our
current policy is to comply with the provisions of the Code, that are applicable to regulated investment companies and to distribute
substantially all our taxable income to our stockholders. Under these provisions, we are not subject to federal income tax on our
taxable income and no federal tax provision is required.</P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">We paid annual distributions to our common stockholders of [&nbsp;&nbsp;
].</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">For additional information, see &ldquo;Dividends and Distributions;
Dividend Reinvestment Plan&rdquo; and &ldquo;Taxation&rdquo; in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><B>Closed-End Fund Structure</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 4.4pt 0pt 0pt">The Fund is a non-diversified, closed-end management
investment company under the 1940 Act, commonly referred to as a &ldquo;closed-end fund.&rdquo; Closed-end management investment
companies differ from open-end management investment companies (commonly referred to as &ldquo;mutual funds&rdquo;) in that closed-end
funds generally list their shares for trading on a stock exchange and do not redeem their stock at the request of the stockholder.
This means that if a stockholder wishes to sell shares of a closed-end management investment company, he or she must trade them
on the market, like any other stock, at the prevailing market price at that time.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 4.4pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0pt">With respect to a mutual fund, if the stockholder
wishes to sell shares of the company, the mutual fund will redeem, or buy back, the shares at NAV. Mutual funds also generally
offer new shares on a continuous basis to new investors, and closed-end management investment companies generally do not. The continuous
inflows and outflows of assets in a mutual fund can make it difficult to manage the company&rsquo;s investments. By comparison,
closed-end management investment companies are generally able to stay more fully invested in securities that are consistent with
their investment objectives and also have greater flexibility to make certain types of investments and to use certain investment
strategies, such as investments in illiquid securities.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">When shares of closed-end management investment
companies are traded, they may trade at a discount to their NAV. This characteristic of shares of closed- end management investment
companies is a risk separate and distinct from the risk that the closed-end management investment company&rsquo;s NAV may decrease
as a result of investment activities. Our conversion to an open-end mutual fund would require an amendment to the Fund&rsquo;s
articles of incorporation.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><B>Investment Focus</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.65pt 0pt 0pt">The Fund&rsquo;s investment objective is to
obtain long-term capital appreciation. This objective may not be changed without the prior approval of the holders of a majority
of the Fund&rsquo;s outstanding voting securities. As further described below, the Fund pursues its objective by investing primarily
in equity and equity-linked securities of public and private companies, including U.S.-based companies, (i) whose securities are
traded principally on a stock exchange in a Caribbean Basin Country, (ii) that have at least 50% of the value of their assets in
a Caribbean Basin Country or (iii) that derive at least 50% of their total revenue from a Caribbean Basin Country, which we refer
to collectively as &ldquo;Caribbean Basin Companies.&rdquo; Current income through receipt of interest or dividends from the Fund&rsquo;s
securities is incidental to the Fund&rsquo;s efforts to attain its investment objective.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.65pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">The Fund invests in Caribbean Basin Companies
that are likely, in the opinion of the Adviser, to benefit from economic, political, structural and technological developments
in the Caribbean Basin Countries. Under normal market conditions, the Fund invests at least 80% of its total assets in equity and
equity-linked securities of Caribbean Basin Companies. This 80% policy may be changed without stockholder approval upon sixty
days written notice to stockholders. Total assets includes the amount of any borrowings for investment purposes. The Fund may invest
more than 25% of its total assets in the securities of U.S.-based companies, which constituted approximately [&nbsp;&nbsp; ]% of the Fund&rsquo;s
total assets as of [&nbsp;&nbsp; ].</P>



<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 7.75pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 7.75pt 0pt 0pt">Investment in Cuban securities or any investment
in Cuba directly or indirectly is currently prohibited under U.S. law. At such time as it becomes legally permissible for U.S.
entities to invest directly in Cuba, the Fund will consider such investments. U.S. law currently prohibits the Fund from investing
its assets in securities of companies that benefit from free trade with Cuba, which we refer to as &ldquo;companies strategically
linked to Cuba.&rdquo; Companies strategically linked to Cuba may include a company that benefits from free trade with Cuba, but
does not meet the definition of Caribbean Basin Company set forth above. If permitted to make such investments upon a lifting or
easing of the U.S. trade embargo against Cuba or pursuant to regulations promulgated by a department or agency of the U.S. Government,
the Fund may invest up to 20% of its assets in equity and equity-linked securities of non-Caribbean Basin Companies strategically
linked to Cuba.</P>



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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 8.75pt 0pt 0pt">The United States re-established diplomatic relations
with Cuba and reopened the U.S. embassy in Havana on July 20, 2015. Additionally, the U.S. Department of the Treasury has implemented
certain regulatory changes that may facilitate travel to Cuba by U.S. trade delegations and by U.S. citizens who engage in certain
commercial activities, although the future impact that these changes may have on travel related to possible investment in Cuba
or Cuban securities (if any such investment activities become legally permissible) is not yet clear. There can be no assurances
that the U.S. trade embargo against Cuba will ever be lifted or eased or, if and when such lifting or easing of the embargo commences,
that the Adviser will be able to identify direct investments in issuers domiciled in Cuba that are acceptable for the Fund. If
investment in securities issued by companies domiciled in Cuba were to be permitted under U.S. law, certain risks and special
considerations not typically associated with investing in securities of U.S. companies would be relevant to such securities. These
risks include, among others, restrictions on foreign investment and on repatriation of capital invested in Cuba, unstable currency
exchange and fluctuation, the absence of a capital market structure or market oriented economy, potential price volatility and
lesser or lack of liquidity of shares listed on a securities market (if one is established), continued political and economic
risks and other risks described in &ldquo;&mdash;Summary Risk Factors&rdquo; in this prospectus supplement and &ldquo;Prospectus
Summary&mdash;Risk Factors and Special Considerations&rdquo; and &ldquo;Risk Factors and Special Considerations&rdquo; in the
accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 11.5pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 8.2pt 0pt 0pt">Equity securities of public and private companies
that may be purchased by the Fund consist of common stock, convertible and non-convertible preferred stock (whether voting or non-voting),
debt with equity warrants and unattached warrants. Debt issued with a warrant entitles the holder to purchase equity shares and
differs from convertible debt because the conversion feature is in the form of a separately traded warrant. Equity-linked securities
of public and private companies that may be purchased by the Fund consist of debt securities convertible into equity and securities
such as warrants, options and futures, the prices of which are functions of the value of the equity securities receivable upon
exercise or settlement thereof.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 8.2pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">We may invest up to 20% of our assets in non-equity
linked debt securities including foreign denominated corporate debt and sovereign debt issued by foreign governments, their agencies
or instrumentalities, or other government-related entities.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">For more information, see &ldquo;Investment Objective and Policies&rdquo;
in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><B>Investment Opportunity</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 19.85pt 0pt 0pt">We intend to use all or substantially all of
the net proceeds from this offering, if any, to acquire investments in accordance with our investment objective and policies as
described in this prospectus supplement and for general corporate purposes. Our Adviser believes any such net proceeds may permit
the Fund to make strategic investments in additional securities of issuers currently held by us or in other issuers not currently
held by us without having to dispose of any securities we hold. Accordingly, we believe this offering may permit the Adviser to
implement the Fund&rsquo;s investment strategy more effectively. In addition to providing us the ability to invest pursuant to
our investment strategy with more flexibility and efficiency, we may achieve certain economies of scale by spreading our fixed
costs over a larger asset base, thereby reducing the Fund&rsquo;s expense ratio per share. See also &ldquo;Use of Proceeds&rdquo;
in this prospectus supplement.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 19.85pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><B>Summary Risk Factors</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">The value of our assets, as well as the market
price of our securities, will fluctuate. Our investments may be risky, and you may lose all or part of your investment in us. The
Fund is a non-diversified, closed-end investment company designed primarily as a long-term investment and not as a trading tool.
The Fund invests generally in a portfolio of Caribbean Basin Companies. An investment in the Fund should be considered speculative
and involves a high degree of risk. The Fund&rsquo;s shares do not represent a deposit or obligation of, and are not guaranteed
or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any governmental agency.</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">Risks that you should carefully consider before investing in
our common stock include, but are not limited to, the following:</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 10.65pt">Investing in the securities of Caribbean Basin Companies involves certain risks and considerations
not typically associated with investing in securities of U.S. issuers, including, but not limited to, currency fluctuations, political
and economic risks, limited liquidity, high inflation and monetary repatriation restrictions.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="text-align: justify; padding-right: 3.4pt">Equity securities in which we invest are sensitive to general movements in
the stock market, may experience a decline in value due to adverse events affecting the issuer of such securities and, in the event
of liquidation or bankruptcy of the issuer, would generally have a lower priority with respect to any distribution of the assets
of the issuer than holders of other classes of securities or creditors.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 15.65pt">Equity-linked securities are subject to market risk and other risks of the referenced equity
security, risks related to the market prices for debt securities and counterparty risk, among other risks.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 8.4pt">Investment in Cuban securities or any investment in Cuba directly or indirectly is currently prohibited
under U.S. law; if investment in securities issued by companies domiciled in Cuba were to be permitted under U.S. law, certain
risks and special considerations not typically associated with investing in securities of U.S. companies would be relevant to those
securities.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>As a &ldquo;non-diversified&rdquo; investment company, the Fund&rsquo;s investments involve greater risks than would be the
case for a similar diversified investment company.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 29pt">The Adviser&rsquo;s judgment about the attractiveness, relative value or potential appreciation
of a particular security or investment strategy may prove to be incorrect.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>We may not distribute to stockholders any net realized long-term capital gains in excess of net realized short-term capital
losses.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 6.2pt">A stockholder&rsquo;s economic and/or voting interest in the Fund may be diluted if we issue additional
shares of common stock in this offering or in any subsequent offering.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 10.65pt">Certain provisions in our articles of incorporation, as amended, and our bylaws could deter
takeover attempts and have an adverse impact on the price of our common stock.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 11.75pt">Certain local or global events have had, and may in the future have, a disruptive effect on
the securities markets, including the market on which our common stock is traded.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 13.55pt">The NAV of our common stock may fluctuate significantly, and the NAV and liquidity of the market
for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may
not be directly related to our operating performance.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>Under the 1940 Act, we generally are prohibited from issuing or selling our common stock at a price below NAV per share.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 6.75pt">Securities traded in foreign markets have often (though not always) performed differently from
securities traded in the United States and often involve special risks not present in U.S. investments that can increase the chances
that we will lose money.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 6.2pt">We may invest from time to time a substantial amount of our assets in issuers located in a single
country or a limited number of countries, which may increase the risk and/or volatility of our investment performance.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 8.4pt">Changes in foreign currency exchange rates may affect the value of our portfolio as securities
and other instruments in which we invest may be denominated or quoted in currencies other than the U.S. dollar.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 3.4pt">The risks associated with investments in emerging markets, including many Caribbean Basin Countries
in which we invest, are usually much greater than those associated with other foreign or U.S. markets.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD STYLE="padding-right: 7.85pt">Certain actual or potential conflicts of interest and risks may arise in connection with the
Adviser, including conflicts of interest caused by compensation arrangements, competition for the time and resources of the Adviser,
conflicts of interest in connection with the management of the Fund&rsquo;s business affairs, conflicts of interest with the Adviser&rsquo;s
management of other accounts, risk due to the Adviser&rsquo;s actions on behalf of its other accounts and clients, risk due to
inside information and risk in transactions with affiliates.</TD></TR></TABLE>





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    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>Shares of our common stock may trade at a market price that is less than the NAV attributable to those shares.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>Sales of our common stock in this offering, or the perception that such sales may occur, may cause the market price of our
common stock to decline.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>We may allocate the net proceeds, if any, from this offering in ways with which you may not agree or which may not enhance
stockholder value.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">&#9642;</TD><TD>We may be unable to invest a portion of the net proceeds, if any, from this offering in a timely manner.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0pt">The risks and special considerations discussed
above apply generally to the investments and strategies that the Adviser will use under normal market conditions. The Fund and
the Adviser also may use other strategies and engage in other investment practices. Additional information about these investment
strategies and practices and related risks is provided in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">For more information about the risks described
above and other risks, see &ldquo;Supplemental Risk Factors&rdquo; in this prospectus supplement and &ldquo;Prospectus Summary&mdash;Risk
Factors and Special Considerations&rdquo; and &ldquo;Risk Factors and Special Considerations&rdquo; in the accompanying prospectus.
In addition, the other information included in this prospectus supplement and the accompanying prospectus contains a discussion
of factors you should carefully consider before deciding to invest in shares of our common stock.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><B>Corporate Information</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 7.8pt 0pt 0pt">We were incorporated in the State of Maryland
on March 10, 1992 and completed our initial public offering in 1993. We are a non-diversified closed-end management investment
company that has registered as an investment company under the 1940 Act. Our offices are located at 119 Washington Avenue, Suite
504 Miami Beach, FL 33139, and our telephone number is (800) TJH-FUND (toll-free) or (305) 271-1900. Our website address is <I>http://herzfeld.com/cuba</I>.
The inclusion of our website address above and elsewhere in this prospectus supplement and the accompanying prospectus is, in each
case, intended to be an inactive textual reference only and not an active hyperlink to our website. The information contained in,
or that can be accessed through, our website is not part of this prospectus supplement or the accompanying prospectus.</P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SUMMARY OF THE TERMS OF THE RIGHTS OFFERING
</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="4" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt; width: 38%">&nbsp;<FONT STYLE="font-size: 11pt"><B>Terms of the Offer</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 62%"><FONT STYLE="font-size: 11pt">[To be provided.]</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Amount Available for Primary Subscription</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">$[&nbsp;&nbsp; ]</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Title</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">Subscription Rights for Common Stock</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Subscription Price</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">Rights may be exercised at a price of $[ ] per share of Common Stock (the &ldquo;Subscription Price&rdquo;). <I>See &ldquo;Terms of the Offer.&rdquo;</I></FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Record Date</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">Rights will be issued to holders of record of the Fund&rsquo;s Common Stock on [ ] (the &ldquo;Record Date&rdquo;). <I>See &ldquo;Terms of the Offer.&rdquo;</I></FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Number of Rights Issued</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">&nbsp;[ ] Right will be issued in respect of each share of Common Stock of the Fund outstanding on the Record Date. <I>See &ldquo;Terms of the Offer.&rdquo;</I></FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Number of Rights Required to Purchase One Common Share</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">A holder of Rights may purchase [ ] share of Common Stock of the Fund for every [ ] Rights exercised. The number of Rights to be issued to a stockholder on the Record Date will be rounded up to the nearest number of Rights evenly divisible by [ ]. <I>See &ldquo;Terms of the Offer.&rdquo;</I></FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Over-Subscription Privilege</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">[To be provided.]</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Transfer of Rights</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">[To be provided.]</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Subscription Period</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">The Rights may be exercised at any time after issuance and prior to expiration of the Rights, which will be 5:00 PM Eastern Time [ ] (the &ldquo;Expiration Date&rdquo;) (the &ldquo;Subscription Period&rdquo;). <I>See &ldquo;Terms of the Offer&rdquo; and &ldquo;Method of Exercise of Rights.&rdquo;</I></FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Offer Expenses</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">The expenses of the Offer are expected to be approximately [ ]. <I>See &ldquo;Use of Proceeds.&rdquo;</I></FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Sale of Rights</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">[To be provided.]</FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Use of Proceeds</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">The Fund estimates the net proceeds of the Offer to be approximately $[ ]. This figure is based on the Subscription Price per share of $[ ] and assumes all new shares of Common Stock offered are sold and that the expenses related to the Offer estimated at approximately $[ ] are paid. The Adviser anticipates that investment of the proceeds will be made in accordance with the Fund&rsquo;s investment objectives and policies as appropriate investment opportunities are identified, which is expected to be substantially completed in approximately three to six months. Pending such investment, the proceeds will be held in short-term cash-equivalent instruments. <I>See &ldquo;Use of Proceeds&rdquo;</I> in the accompanying prospectus. </FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Taxation</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt"><I>See &ldquo;Taxation&rdquo;</I> in the accompanying prospectus. </FONT></TD></TR>
<TR STYLE="background-color: Gainsboro">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 11pt"><B>Rights Agent</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 11pt">[To be provided.]</FONT></TD></TR>
</TABLE>



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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DESCRIPTION OF THE RIGHTS OFFERING </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[To be provided.]</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FEES AND EXPENSES </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The following table is intended to assist you in understanding
the costs and expenses that you will bear directly or indirectly. We caution you that some of the percentages indicated in the
table below are estimates and may vary. Except where the context suggests otherwise, whenever this prospectus supplement and the
accompanying prospectus contains a reference to fees or expenses paid by &ldquo;us&rdquo; or the Fund or that &ldquo;we&rdquo;
will pay fees or expenses, you will indirectly bear such fees or expenses as an investor in the Fund.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; width: 85%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>Fee Table</B></FONT></TD>
    <TD STYLE="white-space: nowrap; width: 15%; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; text-align: justify">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt"><I>Stockholder Transaction Expenses:</I></FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Sales load (as a percentage of the offering price)(1) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Expenses of the Offer (as a percentage of offering price) (1) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Dividend reinvestment plan fees </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">None</FONT></TD>
    </TR>
<TR STYLE="background-color: White">
    <TD COLSPAN="2" STYLE="padding-left: 20pt; text-align: justify"><FONT STYLE="font-size: 11pt">Total stockholder transaction expenses (as a percentage of offering price)</FONT></TD>
    </TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; text-align: justify; width: 85%"><FONT STYLE="font-size: 11pt"><I>Annual Expenses (as a percentage of net assets attributable to common shares):</I></FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center; width: 15%">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Management Fees </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Other expenses (estimated)(2) </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="white-space: nowrap; text-align: justify"><FONT STYLE="font-size: 11pt">Acquired fund fees and expenses(3)</FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="white-space: nowrap; padding-left: 20pt; text-align: justify"><FONT STYLE="font-size: 11pt">Total Annual Expenses </FONT></TD>
    <TD STYLE="white-space: nowrap; text-align: center"><FONT STYLE="font-size: 11pt">[ &nbsp;&nbsp;&nbsp;]%</FONT></TD>
    </TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">(1)</TD><TD STYLE="text-align: justify">The actual amounts in connection with any offering will be set forth in the prospectus supplement
if applicable.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">(2)</TD><TD STYLE="text-align: justify">&ldquo;Other expenses&rdquo; are for the current fiscal year after giving effect to anticipated
net proceeds of the offering, assuming that we incur the estimated offering expenses. These expenses will be borne by the holders
of the shares of Common Stock of the Fund and result in a reduction in the NAV of the shares of Common Stock.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 20pt">(3)</TD><TD STYLE="text-align: justify">Includes fees and expenses of approximately [ ]% incurred indirectly as a result of investment
in shares of one or more &ldquo;Acquired Funds,&rdquo; which include (i) investment companies, or (ii) companies that would be
an investment company under Section 3(a) of the 1940 Act except for exceptions under Sections 3(c)(1) and 3(c)(7) under the 1940
Act.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Example</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The following example demonstrates the projected dollar amount
of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common
stock. In calculating the following expense amounts, we have assumed that our annual operating expenses would remain at the levels
set forth in the table above, and that we pay the transaction expenses set forth in the table above, including a sales load of
2.0% paid by you (the commission to be paid by us with respect to common stock sold by us in this offering).</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="2" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 11pt"><B>Cumulative Expenses Paid for the Period of:</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">1 year</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">3 years</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">5 years</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify"><FONT STYLE="font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 11pt">10 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Gainsboro">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 11pt">An investor would pay the following expenses on a $1,000
    investment, assuming a 5% annual return: </FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$[ &nbsp;&nbsp;]</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$[ &nbsp;&nbsp;]</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$[&nbsp;&nbsp; ]</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 11pt">$[&nbsp;&nbsp; ]</FONT></TD></TR>
</TABLE>



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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="color: #070707"><B>The example and the expenses
in the tables above should not be considered a representation of past or future expenses or annual rates of return and actual expenses
or annual rates of return may be more or less than those shown.</B></FONT> The foregoing table and example are intended to assist
investors in understanding the costs and expenses that an investor in the Fund will bear directly or indirectly. &ldquo;Other Expenses&rdquo;
are based on estimated amounts for the current fiscal year. See &ldquo;Management of the Fund&rdquo; in the Fund&rsquo;s prospectus
for additional information.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The example assumes the reinvestment of all dividends and distributions
at NAV and an expense ratio of [ ]%. The tables above and the assumption in the example of a 5% annual return are required by SEC
regulations applicable to all investment companies. In addition, while the example assumes the reinvestment of all dividends and
distributions at NAV, participants in the Dividend Reinvestment Plan may receive shares purchased or issued at a price or value
different from NAV. See &ldquo;Dividends and Distributions; Dividend Reinvestment Plan&rdquo;in the accompanying prospectus.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SUPPLEMENTAL RISK FACTORS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Investing in our securities involves a number of significant
risks. Before you invest in our securities, you should be aware of various risks, including those described below and those set
forth elsewhere in this prospectus supplement and in the accompanying prospectus. You should carefully consider these risk factors,
together with all of the other information included in this prospectus supplement and the accompanying prospectus, before you decide
whether to make an investment in our securities. The risks set out below are not the only risks we face. Additional risks and uncertainties
not presently known to us or not presently deemed material by us may also impair our operations and performance. If any of the
following events occur, our business, financial condition, and results of operations could be materially and adversely affected.
In such case, our NAV and the trading price of our securities could decline, and you may lose all or part of your investment.</I></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to This Offering</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40pt"><I>Dilution of Net Asset Value and Effect
of Non-Participation in the Offer</I> If a stockholder does not exercise all of his Rights, the stockholder will likely own a smaller
proportional interest in the Fund when the Offer is over (i.e., proportional dilution). In addition, whether or not a stockholder
exercises his Rights, because the subscription price (and net proceeds to the Fund) may be below the Fund&rsquo;s NAV per share
on the expiration date the per share NAV of a stockholder&rsquo;s shares may be diluted (reduced) immediately as a result of the
Offer (i.e., economic dilution).</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The Fund cannot state precisely the amount of any dilution/accretion
because it is not known at this time.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40pt"><I>Discount From Net Asset Value. </I>Shares
of closed-end funds frequently trade at a market price that is less than the value of the net assets attributable to those shares
(a &ldquo;discount&rdquo;). The possibility that the Fund&rsquo;s shares will trade at a discount from NAV is a risk separate and
distinct from the risk that the Fund&rsquo;s NAV will decrease. The risk of purchasing shares of a closed-end fund that might trade
at a discount or unsustainable premium is more pronounced for investors who wish to sell their shares in a relatively short period
of time after purchasing them because, for those investors, realization of a gain or loss on their investments is likely to be
more dependent upon the existence of a premium or discount than upon portfolio performance. The Fund&rsquo;s shares are not redeemable
at the request of stockholders. The Fund may repurchase its shares in the open market or in private transactions, although it has
no present intention to do so. Stockholders desiring liquidity may, subject to applicable securities laws, trade their shares in
the Fund on the NASDAQ Capital Market or other markets on which such shares may trade at the then current market value, which may
differ from the then current NAV.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40pt"><I>Under Subscription</I><B>. </B>It is
possible that the Offer will not be fully subscribed. Under-subscription of the Offer could have an impact on the net proceeds
of the Offer and whether the Fund achieves any benefits.</P>




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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>USE OF PROCEEDS </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">We estimate the net proceeds of the offering to be $[ ] ($[
] if the over-allotment options is exercised in full) based on the public offering price of $[ ] per share and after deducting
underwriting discounts and commissions and estimated offering expenses payable by us.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">Unless otherwise specified in the prospectus supplement, we
intend to use all or substantially all of the net proceeds from a sale of our securities pursuant to this prospectus summary, if
any, for acquiring investments in accordance with our investment objective and policies described in this prospectus supplement
and for general corporate purposes. The Adviser anticipates that such proceeds, if received, will be invested promptly as investment
opportunities are identified, depending on market conditions and the availability of appropriate securities, which we anticipate
will take not more than approximately three to six months from the closing of any offering. Pending investment, the proceeds will
be invested in short-term cash-equivalent instruments. Although the Adviser anticipates that a substantial portion of the proceeds
from any offering will be invested pursuant to the Fund&rsquo;s investment objective and policies, some of the proceeds may be
used to make capital gain distributions required to maintain the Fund&rsquo;s tax status as a regulated investment company.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FINANCIAL HIGHLIGHTS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">The table below sets forth selected data for a share of common
stock outstanding for each period presented. The information for the fiscal year ended June 30, [ ] and June 30, [ ] have been
audited by [ ], the Fund&rsquo;s independent registered public accounting firm. The information for the fiscal years ended June
30, [ ] contained in the table was audited by the Fund&rsquo;s former independent registered public accounting firm. Audited financial
statements for the Fund for the fiscal year ended June 30, [ ], are included in the Annual Report to stockholders. The Annual Report
to stockholders is available without charge by calling (800) TJH-FUND.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[To be provided.]</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CAPITALIZATION </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[To be provided.]</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PRICE RANGE OF COMMON STOCK </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth, for the
periods indicated, the high and low sales prices for the shares on the NASDAQ Capital Market, the NAVs per share on the dates of
the high and low sales prices, and the discount or premium that each sales price represented as a percentage of the preceding NAV:</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Share Price Data </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="text-align: center; vertical-align: bottom">
    <TD NOWRAP STYLE="width: 10%; border-bottom: black 1pt solid; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"></FONT><FONT STYLE="font-size: 11pt"><B>Quarter
                                                                                      Ended</B></FONT></P></TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 17%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">&nbsp;</FONT> <FONT STYLE="font-size: 11pt">&nbsp; &nbsp; <B>High </B></FONT></TD>
    <TD NOWRAP STYLE="width: 3%; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">&nbsp;</FONT> <FONT STYLE="font-size: 11pt"><B>NAV (on High Date)</B></FONT></TD>
    <TD NOWRAP STYLE="width: 3%; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-bottom: black 1pt solid; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Premium/</B></FONT><B> <FONT STYLE="font-size: 11pt"></FONT></B></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B><FONT STYLE="font-size: 11pt">(Discount)</FONT></B></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B><FONT STYLE="font-size: 11pt">(on High Date)</FONT></B></P></TD>
    <TD NOWRAP STYLE="width: 3%; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 10%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">&nbsp;</FONT> <FONT STYLE="font-size: 11pt">&nbsp; &nbsp; <B>Low </B></FONT></TD>
    <TD NOWRAP STYLE="width: 3%; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-bottom: black 1pt solid; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font: 11pt Times New Roman, Times, Serif">&nbsp;</FONT> <FONT STYLE="font-size: 11pt"><B>NAV</B></FONT></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 11pt"><B>(on Low Date)</B></FONT></P></TD>
    <TD NOWRAP STYLE="width: 3%; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-bottom: black 1pt solid; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font: 11pt Times New Roman, Times, Serif"><B>Premium/</B></FONT><B> <FONT STYLE="font-size: 11pt"></FONT></B></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B><FONT STYLE="font-size: 11pt">(Discount)</FONT></B></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B><FONT STYLE="font-size: 11pt">(on Low Date)</FONT></B></P></TD></TR>
</TABLE>


<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">[To be provided.]</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEGAL MATTERS </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pepper Hamilton LLP, 3000 Two Logan Square,
18<SUP>th</SUP> and Arch Streets, Philadelphia, PA 19103 serves as counsel to the Fund.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXPERTS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40pt">The independent registered accounting firm
of the Fund is [ ], located at [ ]. As the independent registered public accounting firm of the Fund, [ ] is an expert in accounting
and auditing and audited the Fund&rsquo;s financial statements included in the Fund&rsquo;s Annual Report to Stockholders for the
fiscal year ended [ ] (the &ldquo;Annual Report&rdquo;).</P>



<!-- Field: Page; Sequence: 29; Value: 48 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 0pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->



<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AVAILABLE INFORMATION</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt">We have filed with the SEC a registration
statement on Form N-2 together with amendments and related exhibits under the Securities Act. The registration statement contains
additional information about us and the securities being offered by this prospectus supplement and the accompanying prospectus.
We are also required to file with or submit to the SEC annual, semi-annual and quarterly reports, proxy statements and other information
about us. You may request copies of these reports and filings, including this prospectus supplement and accompanying prospectus,
free of charge, make inquiries or request other information about us by contacting us by mail at 119 Washington Avenue, Suite 504
Miami Beach, FL 33139, or by telephone at (800) TJH-FUND (toll-free) or (305) 271-1900. Copies of these reports and filings are
also available free of charge through our website at <I>http://herzfeld.com/cuba</I>. The inclusion of our website address above
and elsewhere in this prospectus supplement is, in each case, intended to be an inactive textual reference only and not an active
hyperlink to our website. The information contained in, or that can be accessed through, our website is not part of this prospectus
supplement.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 26.7pt">You may also inspect and copy these reports,
proxy statements and other information, as well as the registration statement and related exhibits and schedules, at the SEC&rsquo;s
Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room may
be obtained by calling the SEC at (202) 551-8090 or toll free at 1 (800) SEC-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements and other information filed electronically by us with the SEC which are available on
the SEC&rsquo;s website at <I>http://www.sec.gov.</I> Copies of these reports, proxy and information statements and other information
may also be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov,
or by writing to the SEC&rsquo;s Public Reference Section, Washington, D.C. 20549.</P>


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</DOCUMENT>
<DOCUMENT>
<TYPE>COVER
<SEQUENCE>10
<FILENAME>filename10.htm
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin-top: 0; margin-bottom: 0; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

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dial: (215) 981- 4659&nbsp;</FONT></P>

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fax: (866) 422 - 2114&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">falcoj@pepperlaw.com</FONT></P>

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4, 2018</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 3in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%"><P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">VIA
                           EDGAR</FONT></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Filing
        Desk&nbsp;</FONT></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">U.S.
        Securities and Exchange Commission&nbsp;</FONT></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">100
        F Street, NE&nbsp;</FONT></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Washington,
        DC 20549&nbsp;</FONT></P></TD>
    <TD STYLE="width: 50%; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>


<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-left: 1in; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Re:</FONT></TD>
    <TD STYLE="width: 3.95in"><P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt"><U>The
                              Herzfeld Caribbean Basin Fund, Inc.&nbsp;</U></FONT></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt"><U>Investment
        Company Act of 1940 File No. 811-06445</U></FONT></P></TD></TR>
</TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="margin-top: 0; margin-bottom: 0; margin-left: 0"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Ladies
and Gentlemen:</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 80pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">On
behalf of the Herzfeld Caribbean Basin Fund, Inc. (the &ldquo;Company&rdquo;), transmitted herewith for filing is a registration
statement on Form N-2 (the "Registration Statement") under the Securities Act of 1933, as amended (the "1933 Act").
Such Registration Statement also constitutes Amendment No. 16 to the Company's registration statement under the Investment Company
Act of 1940, as amended. The Company is a non-diversified closed-end investment company whose shares are listed on the NASDAQ
Capital Market (Ticker Symbol: CUBA).</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 80pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">The
Registration Statement relates to the registration, under the 1933 Act, of the proposed offering by the Company of additional
shares of common stock, par value $0.001 per share (the &ldquo;Shares&rdquo;)&nbsp; on an immediate, delayed or continuous basis
in reliance on Rule&nbsp;415 under the 1933 Act.&nbsp; The Company is registering currently $88,000,000 of Shares, but may increase
such amount, and pay the additional registration fee in connection therewith, in a pre-effective amendment to the Registration
Statement.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 80pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 80pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">A
registration fee of $10,956 is due with respect to this filing. Pursuant to Rule 415(a)(6) under the 1933 Act, this Registration
Statement includes $88,000,000 of unsold securities of the registrant that have been previously registered on the registration
statement on Form N-2 (File No. 333-202213) filed by the registrant on May 21, 2015 (the &ldquo;prior registration statement&rdquo;).
A filing fee of $11,620 was paid under the prior registration statement, of which $11,141 was paid in connection with unsold securities
and is being offset against the total registration fee pursuant to Rule 457(p), resulting in a payment of $0.00 in connection
with the filing of this Registration Statement.</FONT></P>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;<IMG SRC="fp0033212_04.jpg" ALT=""></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">U.S.
Securities and Exchange Commission&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Page
2&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">May
4, 2018&nbsp;</FONT></P>



<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 80pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">The
Company wishes to inform the Commission that it may request acceleration of the effectiveness date of the Registration Statement
in writing or orally.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 80pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 80pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Please
direct any questions concerning this letter to my attention at 215.981.4659 or, in my absence, to John M. Ford, Esq. of this office
at 215.981.4009.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 80pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></P>

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<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Very truly yours,</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">/s/ John P. Falco</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">John P. Falco</FONT></TD></TR>
</TABLE>

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    <TD STYLE="width: 5%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">cc:</FONT></TD>
    <TD STYLE="width: 55%"><P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">John
                           M. Ford, Esq.</FONT></P>
                           <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 11pt">Reanna
                           Lee, Esq.&nbsp;</FONT></P>


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