Exhibit 99.2
ENDI Enterprise Diversified Investor Presentation August 7, 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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SECOND-QUARTER NOTABLES
Enterprise Diversified is focused on creating long-term value for shareholders.
In the second 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.
Developed and approved “Willow Oak 2025: A Five-year Plan for Growth,” to position Willow Oak for aggressive growth
Expanded Willow Oak’s network and broadened exposure for our affiliated funds through our social media presence
Supported the growth of Willow Oak-affiliated funds, increasing investor accounts on the platform by more than 17% compared to the previous year’s second quarter
Further reduced company debt with year-over-year quarter-end comparison, showing a reduction of total company debt by approximately $620,000
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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
6 Q2 Financial Review
For the quarter ended June 30, 2020 – Subsidiaries | Asset Management | Real Estate | Internet | Other | Consolidated |
Revenues | 40,868 | 16,494 | 245,215 | - | 302,577 |
Alluvial Fund | 1,227,951 | - | - | - | 1,227,951 |
Total revenues | 1,268,819 | 16,494 | 245,215 | - | 1,530,528 |
Cost of revenue | - | 7,114 | 79,229 | - | 86,343 |
Operating expenses | 93,742 | 1,075 | 46,434 | 204,391 | 345,642 |
Other income (expense) | - | (6,730) | 2,753 | 3,750 | (227) |
Income (loss) from discontinued operations | - | - | - | 3,149 | 3,149 |
Total net income (loss) | $1,175,077 | $1,575 | $122,305 | $(197,492) | $1,101,465 |
Willow Oak Asset Management partners with unique investment managers and offers operational support through Fund Management Services.
8 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.”
9 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 June 30, 2020, the value of Willow Oak’s investment in Alluvial totaled $9,532,332.
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
10 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
11 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.”
12 Focused on Growth
Increasing assets under management
Adding fundsto 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
13 WILLOW OAK BY THE NUMBERS
Network Growth: In the second quarter of 2020, Willow Oak developed and approved an aggressive five-year growth plan, effectively focusing the company on the short- and longer-term growth opportunities of the asset management division.
In April, Willow Oak launched our Value Hour series. Each episode features Willow Oak’s affiliated fund managers and Fund Management Services team members discussing investment and operational topics relevant to our partners and investors. 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 June 30, 2020 | Quarter Ended June 30, 2019 | % Growth |
Realized and unrealized gains (losses) on investment activity | $1,228,776 | $547,559 | 124.4% |
Management and performance fee revenue | $16,043 | $15,964 | 0.5% |
Fund Management Services revenue | $24,000 | $25,657 | (6.5%) |
Assets under management | $49,503,044 | $53,589,751 | (7.6%) |
Investor accounts | 218 | 185 | 17.8% |
Real Estate
Enterprise Diversified holds a 35% stake in Mt Melrose and operates a historical property portfolio located in Roanoke, Virginia.
15 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.
17 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.
| | 6-30-2020 | 6-30-2019 | 6-30-2018 |
Revenue | $245,215 | $265,917 | $297,587 |
Net Income | $122,305 | $127,180 | $156,357 |
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.
18 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
