AlphaCentric Income Opportunities Fund 
LEGAL PROCEEDINGS

On July 30, 2020, an investor in AIOF filed a putative class action in 
Florida state court, naming the Adviser, the Trust, and others as 
defendants.  Plaintiff alleges that AIOF misrepresented that it held no 
more than 15% of its assets in illiquid securities, among other things, 
and asserts violation of Section 11, 12(a)(2) and 15 of the Securities 
Act of 1933.  The Florida action was dismissed with prejudice on 
September 22, 2021.

On October 14, 2020, the same Plaintiff filed a nearly identical 
putative class action in New York State Court against the same 
defendants.  That complaint was amended on February 26, 2021, 
which added two additional defendants, including sub-advisor 
Garrison Point LLC.  On February 16, 2023, the New York court 
dismissed all but one claim for failure to state a claim.  A class was 
certified on July 2, 2024.

On March 24, 2025, the plaintiff filed a "Note of Issue and 
Certificate of Readiness," indicating that discovery had been 
completed and the case was positioned to move forward.  In 
accordance with the court's rule requiring alternative dispute 
resolution after the close of discovery, and in response to prior 
outreach from the plaintiff's counsel, the parties agreed to private 
mediation.  Subsequent decisions between the parties' respective 
counsel and the mediator led to a settlement in principle.  On 
September 26, 2025, an order was entered staying all deadlines in 
the case to allow the parties to document the settlement and 
prepare a schedule for further proceedings.  A Stipulation of 
Settlement was executed by the parties' counsel on January 20, 
2026, and an unopposed motion for preliminary approval of the 
settlement, including notice to the Class, was filed on January 21, 
2026 (the "Preliminary Approval Motion").  On February 4, 2026, 
the court entered an Order granting the Preliminary Approval 
Motion, including notice to the Class, and setting a hearing date to 
consider final approval of the settlement for June 4, 2026.  

The proposed settlement would resolve all claims against all 
defendants for $20,000,000, all of which would be paid by insurance. 
Management of the Trust has determined that the amount of the 
loss to the Trust is not reasonably estimable because the settlement 
was jointly negotiated to address all claims against all defendants 
without attribution of settlement proceeds to any specific defendant. 
Additionally, the settlement funds were provided by several insurers 
covering multiple defendants as part of a global settlement without 
attribution to any specific defendant. Therefore, consistent with 
ASC 450, Trust management has determined that the settlement 
amount should not be recognized as liability in AIOF's financial 
statements. 

AIOF incurred legal costs in the current fiscal year that relate to the 
class action lawsuit reported on the Statement of Operations as 
Legal fees, which were reimbursed through insurance.  These 
reimbursements are reported on AIOF's Statement of Operations as 
Expenses reimbursed by insurance and also include insurance 
reimbursements related to legal costs incurred in prior years.