We believe that the best way to understand how we will invest and manage your capital is to provide complete transparency with real-world examples. The following archive shares executive investment reviews on real businesses that we either are currently considering or have considered in the past. The purpose of sharing these executive reviews is to portray how we internally assess each investment vehicle for growth opportunity, resource requirement, and overall investment structure.

NLF Food Co

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The organization began as a natural foods oil and ingredient company. Working for fifteen years to perfect novel approaches to the drying, separation, pressing and filtration of plant proteins and oils, the founder has succeeded in developing a processing line that can consistently deliver high grade oils and powders without employing solvents or other chemical elements. The ability to eliminate the use of facilitating chemicals allows the company to produce natural/organic products and delivers considerable market advantage. Several of these processes are protected with patents held by the company. The company has been in revenue for the past 3+ years. The market penetration strategy began with sales in oils and powders, and has recently expanded to also deliver a full line of protein supplements and snack bars. Developing a novel method for processing “puffed” whey protein, the team developed a bar that required no added fillers, preservatives, or artificial ingredients. Introduced into the market in late 2018, this product is well positioned to be a clear disrupter in a relatively crowded segment. This product offering expansion allows the company to be both high quality ingredient supplier and product manufacturer in a growing $4.6B industry. While the pivot to a stronger focus on consumables has proven a strong opportunity for revenue and market share growth, the organization has not lost sight of theRecognizing the value of diversification. They continue to develop protein powders and shake mixes to round out their simply healthy consumer products line with one produce currently being run through clinical trials with a partner organization for third-party health impact certification. The ingredients segment also provids ongoing opportunities with a recent product co-developed with a major multi-national brand which hit the shelves in Q1 2019. The company now has a diverse product offering with proven successes, and is poised for significant growth.

SCI Insurance Recovery

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The target company has achieved consistent positive net incomes in less than two years since inception. Recognizing a disparity between the established need for follow-up personal injury care, and the successful adjudication of claims, the organization was formed to address this opportunity. The organization has developed a novel mechanism to facilitate patient care and efficient claim processing. The process directly addresses the more than 70% of the $3.9B personal injury market not being served by legal representation.

The proprietary process facilitates strong relationships with care providers and with insurance agencies. In less than two years, the company has been able to generate revenue, and to establish consistent positive net income. They have a proven operational model and are now looking to implement an aggressive growth initiative. This initiative will require access to a significant amount of acquisition capital, and operational support to facilitate scale. These are elements that Blue Sky Capital Resources intends to facilitate.

NWTS

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The organization formed in 2011 to provide a full-service experience for clients looking to exit their timeshare obligations. The organization cultivated a proprietary and unique database of 15 million timeshare owners and have leveraged this as their competitive advantage within the marketplace. The industry itself is a high demand – limited competition marketplace. The industry is hindered by a high concentration of predatory practices, a negative reputation within oversight entities, and an arduous marketplace.

The business reports a strong leadership team with trained and in place CEO, CFO, COO, and three general managers. This structure appears to be relatively top-heavy with ten non-management personnel listed on their org chart and employee census, but does leave them looking well positioned for growth. This organization purports a 100% close rate, which contradicts their brand reputation through other sources. Integrity and transparency are two concerns which will need to be better understood.

The organization has significant risk elements including an F rating with the BBB, no affiliation with the leading industry association, and a secondary business with significant conflict of interest exposure. While a clear disruptor or value differentiator does not readily present itself, the opportunity exists to create a competitive intrusion scenario which could induce increased strategic buyer value.

UK-FA

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UK-FA is currently running at approximately £1.8M EBITDA base, and has signed Heads of Terms, as mentioned, with a third acquisition, and we are also close to signing Heads of Terms with a fourth potential target of larger size. The momentum in our deal sourcing is continuing to build. We will be able to build further on that momentum, with our existing corporate bond offering. Our goal is o close these two acquisitions before year-end. Then UK-FA will be at an approximate run rate of £5.0M EBITDA for 2020. For many acquisition strategies, finding deals is challenging. Due to UK-FAs network and established management team, finding deals is not daunting. We are currently being inundated with opportunities.

The main driver behind the significant growth in 2020 is the acquisition of two further IFAs. One of these has a substantial synergy with the group; firstly, they don’t have their own investment proposition, and will instead utilize our DFM services going forward for existing and new clients. Secondly, the company also has a significant shortage of advisers to be able to deal with the current opportunity which is exclusive access to several thousand potential clients, through an agreement with unions across the UK. The unions are recommending this firm to deal with retirees in workplaces nationwide. Historically, these leads have led to a 40% conversion rate, which would be expected to drive at least a doubling of the current UK-FA size. Management has chosen to remain prudent and not included this in the current forecast, until such a time that we have completed this acquisition, which is currently in an advanced stage.