Exhibit 99.1

 

ENDI Enterprise Diversified Investor Presentation May 15, 2020

 

 

 

 

 

Overview

 

Enterprise Diversified, Inc. is primarily focused on partnering with alternative asset managers, in addition to holding interests in companies associated with internet access, real estate, and home services.

 

 

 

 

 

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FIRST QUARTER NOTABLES

 

Enterprise Diversified is focused on creating long-term value for shareholders.

 

In the first quarter of 2020, Enterprise Diversified continued to refocus the company on the

 

asset management business where we have maximum optionality and long-term upside potential.

 

Focused Compounding Fund, LP was launched on January 1, 2020. As an owner of the general partner, Willow Oak earns revenue from fees earned from both managed accounts and the newly launched private partnership and provides operational support through Fund Management Services.

 

Expanded Willow Oak’s network and broadened exposure for our affiliated funds through our social media presence.

 

Reinforced Willow Oak’s operational infrastructure in order to expand Fund Management Services.

 

Further reduced company debt to $382,676 through the divestiture of two real estate properties.  Year-over-year quarter-end comparison shows a reduction of total company debt by $7,555,039.

 

 

 

 

 

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CORPORATE ORGANIZATION – PRIMARY ENTITIES

 

Enterprise Diversified Asset Management Real Estate Operations Non-Core

 

Willow Oak Asset Management Focused Compounding Capital Management EDI Real Estate Sitestar.net

 

Passive stake in historical real estate holdings Royalty stream – home services business Opportunistic investments

 

Alluvial Fund – Strategic partner Bonhoeffer Fund – Internal Fund Fund Management Services – Arquitos Capital Focused Compounding Fund

 

 

 

 

 

 

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Leadership Team

 

Enterprise Diversified Board of Directors Defines and approves the strategic vision of Enterprise Diversified Advises and supports network growth of Willow Oak Asset Management

 

Steven Kiel Executive chairman Oversees the execution of the strategic vision for Enterprise Diversified and its subsidiaries Strategically drives the growth of Willow Oak Asset Management

 

Alea Kleinhammer Vice President & Chief Financial Officer Monitors and reports on the financial strength of Enterprise Diversified and its subsidiaries Oversees the activities and drives the strategic direction of each subsidiary

 

Jessica Greer Vice President & Chief of Staff Manages the daily activities of the asset management division including network building, investor relations, and Fund Management Services Provides operational guidance for Enterprise Diversified and its subsidiaries

 

Mary Kate LaCroix Vice President, Operations Monitors and manages the operational strength of Enterprise Diversified and its subsidiaries Provides assistance in the development of the asset management division including investor relations and Fund Management Services

 

 

 

 

 

 

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Q1 Financial Review

 

For the quarter ended March 31, 2020 – Subsidiaries	Asset Management	Real Estate	Internet	Other	Consolidated
Revenues	35,106	187,149	253,559	-	475,814
Alluvial Fund	(1,780,260)	-	-	-	(1,780,260)
Total revenues	(1,745,154)	187,149	253,559	-	(1,304,446)
Cost of revenue	-	132,209	87,188	-	219,397
Operating expenses	109,241	16,636	47,848	289,433	463,158
Other income (expense)	2,283	(1,268)	370	3,692	5,077
Income (loss) from discontinued operations	-	-	-	10,756	10,756
Total net income (loss)	(1,852,112)	37,036	118,893	(274,985)	(1,971,168)

 

 

 

 

 

 

 

Asset Management

 

Willow Oak Asset Management partners
with unique emerging investment managers.

 

 

 

 

 

 

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FOCUSED COMPOUNDING CAPITAL MANAGEMENT

 

Willow Oak co-launched Focused Compounding Fund, LP, on January 1, 2020. As an owner of Focused Compounding Capital Management, Willow Oak earns 10% of all fees earned through the fund and managed accounts. Willow Oak provides operational support through Fund Management Services.

 

Focused Compounding

 

Investing through both a private partnership and managed accounts, Focused Compounding spends 99% of their time focused on the 1% of stocks every other fund ignores. Finding and investing in great off-the-radar businesses, Focused Compounding achieves uncorrelated returns from a portfolio of companies overlooked by other investors and the market.

 

Cofounders Geoff Gannon and Andrew Kuhn market to wide audiences through regular podcasts, videos, and research. Learn more at focusedcompounding.com.

 

Focused Compounding “We spend 99% of our time on the 1% of stocks every other fund ignores.”

 

 

 

 

 

 

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Alluvial Fund

 

Willow Oak seeded Alluvial Fund in 2017. As a special partner, Willow Oak earns a fee share in addition to income related to our investment. As of March 31, 2020, the value of Willow Oak’s investment in Alluvial totaled $8,300,424.

 

Alluvial Fund

 

Alluvial Fund looks for complicated, underestimated—even stigmatized—businesses across industry sectors and geographies. Operating off the beaten path, Alluvial turns over rocks, conducting comprehensive research to build a portfolio of little-known but well-equipped companies on a path to success.

 

David Waters founded Alluvial Capital Management in 2014; in addition to the fund, Dave manages capital for clients through managed accounts and maintains an investing blog at OTCAdventures.com.

 

Alluvial Fund, LP

 

 

 

 

 

 

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Bonhoeffer Fund

 

Willow Oak co-launched Bonhoeffer Fund in 2017. As the general partner for the fund, Willow Oak earns 50% of all fees earned. Willow Oak provides operational, marketing, and investor relations support through our Fund Management Services.

 

Bonhoeffer Fund

 

The bedrock of the Bonhoeffer Fund is independent thinking combined with rigorous analysis, steeped in the principles of finance and corporate valuation. Applying concepts from developed markets that have been effective, the fund identifies and invests in companies that exhibit those qualities in disrupted industries, misunderstood sectors, and emerging markets.

 

Portfolio Manager Keith Smith is a director for Enterprise Diversified and an advisor for Willow Oak; he brings more than 20 years of experience as a valuation expert and a decade of personal investing experience during which he developed and executed the Bonhoeffer strategy, producing exceptional returns over that time.

 

B Bonhoeffer Capital Management

 

 

 

 

 

 

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Fund Management Services

 

Willow Oak launched our Fund Management Services (FMS) in 2018, offering tailored services to boutique fund managers. Willow Oak’s FMS team provides investor relations, marketing, compliance, and operational infrastructure to help funds scale.

 

Alluvial Fund, LP Arquitos Capital Management B Bonhoeffer Capital Management Focused Compounding “We spend 99% of our time on the 1% of stocks every other fund ignores.”

 

 

 

 

 

 

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Focused on growth

 

Increasing assets under management

 

Adding funds to the Willow Oak platform

 

Increasing visibility of Willow Oak and associated funds

 

Growing the Willow Oak network of emerging manager partners, investors, and Fund Management Services clients

 

 

 

 

 

 

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Willow Oak by the numbers

 

Network Growth: In the first quarter of 2020, Willow Oak launched Focused Compounding Fund with partners, Focused Compounding Capital Management. In addition to this private partnership, co-managers Geoff Gannon and Andrew Kuhn offer capital management services through managed accounts and have garnered a wide following through their subscription service and podcast.

 

Willow Oak and our affiliated fund managers were featured on numerous podcasts and investment media sites during the quarter. Sign up to receive the latest news on our affiliated funds at willowoakfunds.com/news-and-views and subscribe to our YouTube channel at youtube.com/WillowOakAssetManagement.

 

	Quarter Ended March 31, 2020	Quarter Ended March 31, 2019	% Growth
Realized and unrealized gains (losses) on investment activity	(1,784,406)	655,716	(372.1%)
Management and performance fee revenue	15,252	15,009	1.6%
Fund Management Services revenue	24,000	26,255	(8.6%)
Assets under management	$44,249,755	$53,659,819	(17.5%)
Investor accounts	222	182	22.0%

 

 

 

 

 

 

Real Estate

 

Enterprise Diversified holds a 35% stake in Mt Melrose and operates a historical property portfolio located in Roanoke, Virginia.

 

 

 

 

 

 

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Real Estate

 

Mt Melrose, LLC (MM)

 

Enterprise Diversified holds a 35% ownership stake in Mt Melrose and is in partnership with a third-party operator. Financial results for Mt Melrose have been deconsolidated as of the period ended June 30, 2019.

 

EDI Real Estate, LLC (EDI)

 

EDI consists of a portfolio of six properties and several vacant lots located in Roanoke, Virginia. These properties are legacy properties that were purchased by previous management prior to 2016 as part of a reinvestment strategy for the internet segment’s excess cash flows.

 

 

 

 

 

 

Non-Core

 

Enterprise Diversified carries out several non-core activities consisting of legacy businesses and opportunistic investments.

 

 

 

 

 

 

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Non-Core

Sitestar.net

INTERNET

Sitestar.net offers consumer and business-grade internet access, wholesale managed modem services, web hosting, third-party software as a reseller, and various ancillary services to customers in the United States and Canada.

	3-31-2020	3-31-2019	3-31-2018
Revenue	$253,559	$274,902	$301,736
Net Income	$118,893	$124,412	$190,607

TRIAD GUARANTY

Enterprise Diversified issued a high-interest note payable with recourse to Triad Guaranty, Inc., a post-bankruptcy shell company with approximately $500 million in Net Operating Loss carryforwards that begin to expire in 2028.

HOME SERVICES

Enterprise Diversified sold its former home services subsidiary on May 24, 2019, in exchange for a royalty stream over the next five years. We receive 7.5% of revenue generated by our customers in the first year and 5% of revenue for each of the next four years.

 

 

 

 

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Disclaimer

This presentation may contain forward-looking statements intended to qualify for the safe harbor contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements often include words such as may, will, should, anticipate, estimate, expect, project, intend, plan, believe, seek, would, could, and similar words or expressions and are made in connection with discussions of future operating or financial performance. 

Forward-looking statements reflect management’s expectations at the date of this presentation regarding future conditions, events, or results. They are not guaranties of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. Our actual results and financial condition may differ materially from what is anticipated by the forward-looking statements. 

There are many factors that could cause actual conditions, events, or results to differ from those anticipated by the forward-looking statements contained in this presentation. Readers are cautioned not to place undue reliance on forward-looking statements in this presentation. We do not undertake to update any forward-looking statements included in this presentation. The statements in this presentation are for the convenience of our shareholders, capital partners, and other stakeholders and are qualified in their entirety by reports that we file with the SEC.

 

 

 

 

ENDI Enterprise Diversified

www.enterprisediversified.com