TICKER|CUSIP AAIDX |05465F103 AXONIC ALTERNATIVE INCOME FUND managed by Axonic Capital LCC

Axonic Capital Overview

BUSINESS OUR COMPETITIVE EDGE Axonic Capital (“Axonic”) is an independent financial Axonic Capital’s investment philosophy centers on services firm headquartered in New York City offering asset rigorous . Investment decisions management services across structured credit, systematic aremadebasedontheprofileoffuturecashflows fixed income and commercial lending. Our business model is associated with asset-backed securities. The Firm’s providing opportunistic investment solutions from an belief is that the most informed, sophisticated and experienced team with expertise in creating unique knowledgeable investors have an advantage over other advantages through sourcing and asset allocation. market participants. The Firm seeks to constantly Founded in 20101, Axonic manages approximately $3.92 create or improve an edge over other market billion. participants through a comprehensive understanding of security structure and underlying collateral Axonic invests in structured credit instruments, including performance. commercial mortgage-backed securities and loans, non- agency residential mortgage-backed securities, agency Axonic’s investment professionals are experienced in credit risk transfers, private debt, mortgage and real estate- many facets of the market, including sourcing, related credit and equities, and various single-name and structuring and trading of structured credit securities. index credit default swaps. Axonic believes that integrating its extensive networks Axonic strives to protect and compound client capital into individual investment processes creates a through superior investment due diligence, robust use of significant investment edge. technology analytics and opportunistic themes.

History of Axonic Capital

Axonic has a decade of structured credit, fixed income and commercial real estate experience offered through a variety of investment vehicles.

Axonic founded in 2010 Launched ABS with ~110m1 business Split Level Launched the LLC founded Launched CMBS Alternative Income March 2009; business Fund (AAIDX), a predecessor AXSIX surpasses closed-end interval to Axonic $900mm in fund Capital LLC AUM

2009–2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Axonic began Launched Special Launched Axonic operations in Firm reached Firm reached Strategic Income $2B in AUM Opportunities SBL January 2011 $1B in AUM Strategy Fund (AXSIX), a daily mutual fund

Launched RMBS business

1. Axonic began trading in 2009 through Split Level LLC, Axonic’ s predecessor. The Firm officially began operations as Axonic Capital in January 2011. 2. Estimated as of March 31, 2021 3. As of December 31, 2010

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What is an Interval Fund?

Open-End Interval Fund Closed-End Mutual Fund Mutual Fund

Daily Continuously Valuation offered (POP Trades on the Unrestricted at NAV) secondary market access to both at the market Daily 1099 Tax Reporting private and price (at a Redemptions public discount or investments premium to NAV) Repurchased Regulated under at NAV the Investment Company Act of 1940

An Interval Fund is a registered closed-end fund regulated under the Investment Company Act of 1940. It provides the continuous sale of shares and the portfolio management flexibility of a closed-end fund through the use of sophisticated strategies, which include investments in illiquid assets.

. Provides individual investors access to alternative investments typically limited to institutional investors, funds and private equity firms . Continuously offered registered closed-end fund that can be purchased daily at the Net Asset Value (NAV) . Unrestricted access to illiquid investments. Not limited to the 15% threshold of an open-end mutual fund . Implement illiquid strategies that play out over a longer period of time that can deliver returns that are uncorrelated to equity markets . Allows for a portfolio to be constructed with a greater concentration of potentially higher returning assets with a wide range of liquidity profiles without the asset liability mismatch of a daily liquidity mutual fund . Invests in income-producing products and strategies and offers investors periodic distributions . Provides limited liquidity to investors on a periodic basis via repurchasing of the fund shares at NAV . Issues Tax Form 1099

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Repurchase of Shares

An interval fund offers to repurchase shares at a periodic interval (monthly, quarterly, bi-annually, annually) at the specified NAV. The fund will offer to repurchase a minimum of 5% (or as determined by the prospectus) of the total fund assets during the repurchase period.* Interval fund shares do not trade on the secondary markets.

. Repurchase Request Date: the date in which the fund must receive shareholder’s repurchase request . Repurchase Pricing Date: The date by which the fund determines the NAV at which it will repurchase shares . Repurchase Payment Date: the date by which the fund must pay its shareholders for the repurchased shares (within 7 days of the repurchase pricing date)

Notice to Repurchase Repurchase Repurchase Request Pricing Payment Shareholders Date Date Date

1-14 1-7 Payment of 21 days days days Proceeds

Notice sent at least All repurchase requests NAV of shares to be 21 days before must be received repurchased is calculated request deadline

The repurchase price of the Shares will be the NAV of the Shares as of the close of regular trading on the NYSE on the Repurchase Pricing Date

Advantages of an Interval Funds

. Interval funds can allow individual investors to pursue an institutional-style investment in alternative assets that may help to build a diversified portfolio. By investing in a range of non-correlated assets, an investor can smooth volatility while generating higher potential income and total returns. . Interval funds are not subject to the daily trading volatility to which traditional mutual funds and exchange-traded funds are subject. Therefore, they experience moderate price fluctuations on a day-to- day basis. . Investors in mutual funds can sell their shares at any time. As a result, they are susceptible to emotional trading. When markets fall, they may panic and sell their shares at a loss instead of remaining committed to their long-term investment plan. The interval fund structure may encourage investors to invest for the long term.

* Unlike an investor in most closed-end funds, Shareholders should not expect to be able to sell their Shares regardless of how the Fund performs. An investment in the Fund is considered illiquid. An investment in the Fund may not be suitable for investors who may need the money they invest in a specified timeframe.

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Management Team Clayton DeGiacinto Managing Partner, Chief Investment Officer Prior to forming Axonic in 2010, Mr. DeGiacinto was responsible for building out the mortgage investment platform at Tower Research Capital LLC and was the Senior Portfolio Manager for Split Level LLC, the predecessor fund to the Axonic Credit Opportunities Funds. He previously led a mortgage trading desk in the Fixed Income, Currency and Commodities division at Goldman Sachs & Co. Mr. DeGiacinto’s duties included the and retention of bonds backed by adjustable- rate and negatively amortizing residential mortgages. He was also responsible for running the RMBS credit book for all prime, alt-A and negatively amortizing structures. Mr. DeGiacinto previously served as a Captain in the U.S. Army in the 25th Infantry Division (Hawaii) after completing the U.S. Army Ranger School, Airborne School and Air Assault Course. He is a graduate of the United States Military Academy at West Point and holds an M.B.A. from the Wharton School at the University of Pennsylvania.

Jamshed Engineer Partner, Co-Head of Credit Mr. Engineer has been with Axonic since inception and leads our residential and asset backed securities strategies. Prior to joining Axonic, Mr. Engineer worked at Tower Research Capital as Vice President of Mortgage Trading. Prior to Tower, he worked in the Fixed Income, Currency and Commodities group at Goldman Sachs & Co. with responsibilities including structuring, valuing and advising on diverse securitization products for both principal and third party transactions. Prior to Goldman, Mr. Engineer was at KPMG where he structured various securitization transactions in the structured products group. Mr. Engineer was previously employed at Tata TD Waterhouse and Tata Finance in Mumbai. Mr. Engineer received his Bachelor of Commerce in Finance and Accounting from University of Mumbai and holds an M.B.A. in Finance from the University of Southern California.

Matthew Weinstein Partner, Co-Head of Credit Mr. Weinstein joined Axonic in 2012 and oversees the Firm’s CRE and CMBS investment teams. Mr. Weinstein is also the head of the CRE investment committee. Prior to joining the Firm, Mr. Weinstein was a Vice President at Macquarie Capital where he managed a Commercial Mortgage Backed Securities (CMBS) principal investment strategy from 2010 through 2012. From 2003 to 2008, he was an Associate Director in the CMBS group at Bear Stearns & Co. Mr. Weinstein received his MBA in Finance at the New York University Stern School of Business and graduated from Cornell University with a BS in Industrial Labor Relations.

Peter Carey Head of Business Development Mr. Carey joined Axonic in May 2018 to lead the firm’s Business Development team. Mr. Carey has over 17 years of experience in the industry and joined Axonic from Archview Investment Group, where he served as Head of Business Development, leading the firm’s institutional marketing efforts. Prior to joining Archview Mr. Carey was a Managing Director at SkyBridge Capital where he led the firm’s solutions business. Prior to SkyBridge, Mr. Carey was a Senior Investment Officer and Director of Strategies at the New York State Common Retirement Fund, where he led the successful restructuring of the Fund's $5 billion hedge fund portfolio. Earlier in his career Mr. Carey worked on the Institutional Fixed Income sales desk at Bear Stearns. Mr. Carey is a graduate of the United States Military Academy at West Point and served as an Infantry officer in the US Army. He holds an MBA in Finance from the University of Southern California.

Axonic Capital Attn: Business Development and Investor Relations 520 Madison Avenue, 42nd Floor New York, NY 10022

[email protected] Phone (212) 259-0430

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Disclosures

A “non-diversified” fund has the ability to take larger positions in a smaller number of issues than a “diversified” fund. Non-diversified funds will generally experience greater price volatility.

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. To obtain a prospectus containing this and other information, please call (212) 259-0430 or download the file from www.AxonicFunds.com. Please read the prospectus carefully before you invest.

ALPS Distributors, Inc. is the distributor of the Axonic Alternative Income Fund (ALPS Distributors, Inc. 1290 Broadway, Suite 1100, Denver, CO 80203). Axonic Capital LLC (the Fund’s adviser), ALPS Distributors, Inc., and BNY Mellon are not affiliated.

The Fund is an unlisted closed-end “interval fund.” Limited liquidity is provided to shareholders only through the fund’s quarterly offers to repurchase between 5% to 25% of its outstanding shares at net asset value (subject to applicable law and approval of the Board of Trustees, the Fund currently expects to offer to repurchase 5% of outstanding shares per quarter). There is no secondary market for the fund’s shares and none is expected to develop. Investors should consider shares of the Fund to be an illiquid investment.

It is important to note that differences exist between the Fund’s daily internal accounting records, the Fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the Fund may not issue a Section 19 Notice in situations where the Fund’s financial statements prepared later and in accordance with U.S. GAAP or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital.

The Fund’s distribution rate may be affected by numerous factors, including changes in realized and projected market returns, fund performance, and other factors. There is no assurance that quarterly distributions paid by the Fund will be maintained at a certain level or that dividends will be paid at all. The fund is new and has limited operating history.

Accordingly, the Fund should be considered a speculative investment that entails substantial risks, and prospective investors should invest in the Fund only if they can sustain a complete loss of their investment.

Investments made by a Fund and the results achieved by a Fund are not expected to be the same as those made by any other Axonic-advised account, including those with a similar name, investment objective or policies. As a new or smaller Fund, the performance may not represent how the Fund is expected to or may perform in the long-term. The Fund has limited operating history for investors to evaluate and may not attract sufficient assets to achieve investment and trading efficiencies.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

Risk Factors An investment in the Fund is subject to, among others, the following risks:

The principal risks of investing in the Fund are summarized below. There may be circumstances that could prevent the Fund from achieving its investment objective and you may lose money by investing in the Fund. You should carefully consider the Fund’s investment risks before deciding whether to invest in the Fund. An investment in the Fund is not a deposit at a bank and is not insured or guaranteed by the Federal Deposit Corporation or any other government agency.

1. There is not expected to be any secondary trading market in the Shares. 2. Unlike an investor in most closed-end funds, Shareholders should not expect to be able to sell their Shares regardless of how the Fund performs. An investment in the Fund is considered illiquid. An investment in the Fund may not be suitable for investors who may need the money they invest in a specified timeframe. 3. Unlike most closed-end funds, the Shares are not listed on any securities exchange. The Fund intends to provide liquidity through quarterly offers to repurchase a limited amount of the Fund’s Shares (at least 5%). 4. There is no assurance that quarterly distributions paid by the Fund will be maintained at a certain level or that dividends will be paid at all. 5. The Fund’s distributions may be funded from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to the Fund for investment. Any capital returned to Shareholders through distributions will be distributed after payment of fees and expenses 6. A return of capital to Shareholders is a return of a portion of their original investment in the Fund, thereby reducing the tax basis of their investment. As a result from such reduction in tax basis, Shareholders may be subject to tax in connection with the sale of Fund Shares, even if such Shares are sold at a loss relative to the Shareholder’s original investment.

Definitions Asset Backed Securities a financial security collateralized by a pool of assets such as loans, leases, credit card debt, royalties or receivables

Commercial Mortgage-Backed Securities (CMBS) secured by mortgages on commercial properties rather than residential real estate

Mortgage-backed securities (MBS) bonds secured by home and other real estate loans. They are created when a number of these loans, usually with similar characteristics, are pooled together

Net Asset Value (NAV) represents the net value of an entity and is calculated as the total value of the entity’s assets minus the total value of its liabilities.

Public Offering Price (POP) the price at which new issues of stock are offered to the public by an underwriter.

Residential Mortgage-Backed Securities (RMBS) a debt-based security backed by the interest paid on loans for residences.

AXC000143

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