Introduction

Compass Point's acquisition philosophy is based upon buying excellent businesses at reasonable prices. Our investment strategy is based on the following tenets:

1. Using A Disciplined Investment Approach: Compass Point will apply rigorous discipline to the transaction process and we have developed suitability criteria for evaluating prospective acquisitions. Among other factors, we seek to invest in companies that possess certain attributes:

* Sustainable competitive advantage,
* History of healthy and stable cash flows,
* Reputation of unquestionable integrity, and
* Straightforward business model

Compass Point will not invest in pure-play technology or biotech ventures, start-ups or any unprofitable venture relying on ephemeral "future" growth expectations.

2. Focusing On "Small-Cap" Acquisitions: Compass Point's philosophy is to invest solely in "small-cap" companies. We define these businesses as those having up to $5 million in free cash flow. The rationale behind our "small-cap" focus is that we believe that more opportunities exist in this relatively inefficient market and that the possibility of finding an excellent business at a reasonable valuation is much higher. Specifically, Compass Point targets "small-cap" private companies, non-core divisions of large corporations, and, on a selective basis, we may pursue "buy-and-build" or "roll-up" strategies in fragmented industries where a consolidation strategy will yield synergies and a competitive advantage.

3. Striving To Create Value Alongside All Stakeholders: Compass Point believes that a successful transaction is one in which the economic interests of all stakeholders (i.e. owners, managers and employees) are fully aligned. In all of our transactions, we endeavor to include: (a) some form of performance-based profit sharing plan; and (b) when appropriate, direct ownership of common equity by a broad group of managers and key employees. We firmly believe that this employee-ownership philosophy will result in increased performance and a level of commitment that will enhance our investment returns. Compass Point's emphasis is on building fundamental value, and we take a long-term perspective toward our investments, which includes making sure that all parties have a stake in the success of the venture.