Investment Pitches

Pitch Summary:
Paywalled (TriplePoint is encumbered by high fees, weak management, and a weaker loan book saddled by portfolio company bankruptcies and upside-down startups. The Bear Cave believes TriplePoint’s equity may be severely impaired, if it has any value at all.) Update 4/17/25 - Follow-up: TriplePoint’s old troubled loans have been replaced by new troubled loans and the company will need to make significant write-downs and additional dividend cuts going forward.

BSD Analysis:
TriplePoint Venture Growth lends to late-stage VC-backed companies, giving investors exposure to venture credit risk. The short case points to portfolio concentration in unprofitable startups, whose valuations are already under pressure in the private markets. Non-accruals could rise sharply if the venture funding cycle remains soft, threatening dividend coverage. TPVG trades on its yield, but if credit metrics deteriorate, the stock could re-rate materially lower. Sophisticated investors should track both venture exit activity and TPVG’s underwriting discipline as leading indicators.

Pitch Summary:
During the quarter we purchased shares of Sylogist Ltd. and setting the stage (or table, if you will) for this investment are the many cooking shows in my rotation, where I love watching chefs prepare and talk about food. These shows offer many parallels to investing and portfolio management, one of which is that the greatest chefs understand that the best recipes are all about the ingredients. I believe Sylogist is following the recipe for success, with the ingredients consisting of a high-quality business, strong growth prospects, a net cash balance sheet, good management, and free cash flow generation at a bargain price. Sylogist is a public sector software-as-a-service (SaaS) business whose stock has been orphaned due to its history of poor corporate governance along with a recently implemented strategy shift and dividend cut that caught investors off guard but was executed with the sole focus of driving shareholder value. This, along with the massive selloff in small companies and software related businesses during 2022 has caused the stock to be left for dead, despite possessing some characteristics that point to an intrinsic value much higher than where the shares trade today. Over time, and with proper execution, I believe our shares could be worth multiples of what we paid. Sylogist is a Canadian listed SaaS business that provides mission-critical software solutions to nearly 2,000 customers worldwide in three public sector verticals of Non-profits/NGOs through their SylogistMission segment, Government through their SylogistGov segment, and Education through their SylogistEd segment. Within these verticals, software solutions consist of ERP, CRM, fundraising, education administration, and payments products. These products carry high value propositions and sticky customer relationships as they serve a critical need for organizations of all sizes. The areas within the niche that Sylogist occupies have less competition than enterprise level software businesses, who typically avoid these end markets and are not well adapted to offer the customized solutions that Sylogist can. One example would be a growing non-profit that requires more advanced fund accounting and donor management software that integrates with the rest of the organizations applications, thereby eliminating sometimes manual processes for data input and storage. The organization could use Sylogist's ERP product to address those needs. Historically, despite underinvestment in customer relationships under the previous management team, customer retention has been in the high 90% range as there is reluctancy to switch providers given the integration into their workflows and systems. Sylogist has three primary revenue segments made up of Cloud Subscriptions (40% of revenues), Maintenance and Support (25%) and Professional Services (29%). Approximately 65-70% of revenues are recurring between Cloud Subscriptions and Maintenance and Support, providing both visibility and resiliency into future revenues, with software gross margins in excess of 75% and cash flow conversion in the 70-80% range. Several of Sylogist's products are built using the Microsoft Dynamics platform, where Sylogist can not only customize products for specific verticals but can also benefit from the reputation and track record of Microsoft during customer acquisition and when cross-selling adjacent products and services. Moving forward, management's strategy is to grow both organically and via M&A, while focusing on the organic growth of software subscription revenues. Software businesses, and among those, Sylogist's peers, can be great businesses, especially when tied to critical parts of an organization's operations. They share characteristics such as strong organic growth, high revenue retention, high margins, and strong cash flow conversion, while providing remarkable durability through all economic cycles. Publicly traded peers Tyler Technologies, Blackbaud and Sage have long histories of growth and profitability, while each grew revenues through the financial crisis with no decline in operating margins. Strong fundamentals and durability means that most of Sylogist's peers trade at valuations of 20x EBITDA or more, compared to <9.0x NTM EBITDA for Sylogist. For the reasons behind the valuation disparity, I'd point you toward the company's history. The early version of Sylogist consisted of a low margin, no growth, reseller of software until prior management made some acquisitions in the early 2000's to capture more of the customer relationship and to focus on building a public market software business. Unfortunately, prior management made it a point to focus on tuck-in M&A, manage acquisitions for cash flow, neglect organic growth, and milk the company for compensation. Poor corporate governance, a company with no business being public, and a management team with no desire to drive shareholder value was going nowhere and would never garner a proper public company multiple. Prior to the former CEO's retirement in late 2020, Sylogist ran a strategic review (an attempt to sell the business) and emerged with the Board determining that the best path forward would be to pursue the near-term market opportunities for growth in order to drive shareholder value. They also went on a search for a new CEO who would be given an organic growth mandate. Enter current CEO Bill Wood, an industry veteran who was a founding member of Blackbaud, one of Sylogist's direct competitors, also previously serving as President and CEO of two software businesses during a 17-year span that culminated in both businesses being acquired, one by Constellation Software and the other by a private equity firm. Shortly into his tenure, Bill cut the dividend (a 9% yield), freeing up nearly $12mm in annual cash flow, and formally announced the company's strategic shift toward growing organically and via M&A. As part of the strategy shift, EBITDA margins would be taken down from the low-mid 50% range to 30%, while maintaining a Rule of 40 posture, with the excess cash flow being reinvested into product development, sales and marketing, and M&A. The company's credit facility was also increased by 65% to $125mm, providing additional firepower for acquisitions, while a share buyback program was put in place that would allow the company to repurchase up to 10% of shares outstanding. The market, along with yield focused investors, did not like this news. I, however, am thrilled with these decisions, as I tend to seek out management teams willing to endure short-term discomfort in exchange for potential long-term value. The strategy is working, and investors have been slow to recognize the shift, despite what I believe to be an important inflection point. In just three short years, Sylogist has made tremendous progress toward building a software platform by strengthening the management team, launching and acquiring in-demand products, repairing customer relationships, improving the NPS score, and returning the business to organic revenue growth. To date, efforts to accelerate sales, marketing and product development have been and should continue to prove successful as the sticky products that Sylogist offers, and the collegial nature of their end markets means that a continued organic growth profile shouldn't be too difficult a hurdle to overcome. In fact, Sylogist is firing on all cylinders, growing bookings, revenues and cash flows effectively, and as of the most recent quarter, reported positive sequential growth in organic software subscription revenue. During the most recent earnings call, management highlighted an attractive sales pipeline and new bookings matriculating at a higher rate than at any point since the current management team was brought on. This, along with the hiring of an experienced Chief Revenue Officer and the continued flexing of marketing muscle bodes well for future organic growth. A recent upgrade to the CFO position should also come with improved communication and disclosures, helping investors better understand the story and strong fundamentals. Sylogist's strategy shift will be bolstered by significant tailwinds including the large addressable market among their customer base, low digital penetration among the same customer base, the acceleration of software tools post-COVID, and a fragmented market for products and services that Sylogist can tap into for M&A. Since their hiring, management has completed four acquisitions, all largely accretive and providing both the opportunity for continued organic revenue growth and the opportunity to add valuable products and services to their platform. According to management, the deal pipeline remains incredibly full, with hundreds of potential targets on their list. As private market valuations continue to come down, we should see additional transactions take place that help grow the top and bottom lines over time. Sylogist could also find themselves on the receiving end of an acquisition offer, as the government software space is incredibly acquisitive due to the fragmented nature of these businesses, value to both strategic and financial acquirers, and durability of the business models. In a macro environment where two of the biggest worries are inflation and a recession, the combination of non-discretionary recurring revenue and pricing power makes for an attractive setup. Even share-losing Blackbaud, who has consistently underinvested in the business to the point of declining revenues and margins, finds itself in the midst of a take-private offer from a PE firm. Sylogist remains a 'show me' story but I believe the right ingredients are in place. The company is small. Publicly traded float is minimal. Shares trade over the counter in the US and have zero US analyst coverage. Management is non-promotional and IR efforts could improve. The potential for mispricing here is significant and I believe shares could be worth multiples of what we paid looking out a few years. I like the setup and look forward to discussing Sylogist in future letters.

BSD Analysis:
The manager initiated a new position in Sylogist, a public sector SaaS company serving 2,000 customers across non-profits, government, and education verticals with mission-critical software solutions. The investment thesis centers on a dramatic management transformation under new CEO Bill Wood, a Blackbaud founder who cut the 9% dividend to reinvest $12mm annually in growth initiatives. The company trades at <9x EBITDA versus peers at 20x+ due to historical poor governance, creating a significant valuation gap. Sylogist generates 65-70% recurring revenue with 75%+ software gross margins and high-90s customer retention rates, demonstrating strong unit economics. The strategy shift is working with positive organic subscription growth, accelerating bookings, and four accretive acquisitions completed. Management has expanded the credit facility to $125mm for M&A while implementing a 10% share buyback program. The fragmented public sector software market offers abundant acquisition opportunities as private valuations decline, while the company itself could become an acquisition target given industry consolidation trends.

Pitch Summary:
As discussed, Polished remains in the midst of their sales process whereby I'd expect to hear some progress updates by the end of Q2 if not before, along with the company's long-awaited financials that should be released around the same time. A sale of the business is not a foregone conclusion, but noteworthy steps have been taken to right-size the company on the continued path toward profitable growth. I believe there are interested parties (as was the case pre-internal investigation) that may emerge as serious bidders as management and Jefferies continue to work together to find an acquirer at an appropriate price. In late April, the company put out a press release with sales estimates for the completed FY22, Q1'23 and management's outlook for FY23. Despite the recent events, the press release and outlook were largely positive and provided for the first time since early 2022 a glimpse into how the business is faring. Despite the tough macro environment, pressure on the consumer, housing related declines and notably pulled forward appliance purchase activity during the past few years, the low end of the company's FY23 outlook would represent just a -7% sales decline, with EBITDA margins holding up well and the company remaining cash flow positive. This is about half the decline of the broader industry from Q4'22 through Q1'23. There is concern that the company falls short of this outlook given it implies a significant pick up in the second half of 2023, but I'd imagine that their commentary was heavily lawyered and heavily scrutinized, given that after all this time, putting out a set of expectations, unprompted, that they fail to deliver on, would fall squarely outside the realm of sanity. Furthermore, the company remains in good standing with their lender, Bank of America, and although the company's net debt position has not been disclosed, reading between the lines, I believe prior management, in addition to their other missteps, were granted a large credit facility and used it to boost marketing spend and lever up inventory at exactly the wrong time, typical of a CEO who operated on 'gut feel' as opposed to using data, detailed operating procedures or supply chain management processes. As management reduces inventory levels more in line with current demand, I suspect they will continue to pay down debt moving forward. I will continue to provide updates as they occur while I remain patient in anticipation of a positive outcome.

BSD Analysis:
The manager maintains a bullish stance on Polished.com despite ongoing challenges, viewing the active sales process with Jefferies as a potential catalyst. The company's FY23 guidance projects only a 7% sales decline versus broader industry declines of double that magnitude, demonstrating relative resilience. EBITDA margins and cash flow generation remain positive despite macro headwinds and housing market weakness. Management has right-sized operations and maintains good standing with Bank of America, suggesting financial stability. The manager believes previous management's poor inventory and marketing timing created temporary issues that current leadership is addressing. Debt reduction through inventory normalization should improve the balance sheet going forward. The sales process timeline suggests resolution by Q2 2023 with interested parties likely to emerge. This represents a special situation with potential for significant upside through either operational improvement or strategic sale.

Pitch Summary:
I added to our position in Basic-Fit during the quarter as the business continues to execute in line with management's strategy and has recovered nicely since the pandemic forced them to close their doors for an extended period during 2020 and 2021. Basic Fit remains one of the most well-positioned businesses in our portfolio from a competitive standpoint and has been able to raise prices during a period when the majority of their competitors are struggling, closing locations and ceasing expansion plans. As a reminder, Basic-Fit's scale and expertise enables them to construct gyms for a lower cost compared to competitors, allowing them to enter and expand into markets with a lower pricing strategy given the lower breakeven membership numbers that competitors can't match. This means that even the deepest of deep pockets crazy enough to enter one of BFIT's markets would have to endure years of operating losses before seeing a positive impact to revenues and ARPU, saying nothing about the efforts and resources that would be required to build a brand. I look forward to what 2023 and 2024 will bring.

BSD Analysis:
The manager increased the Basic-Fit position, highlighting the company's superior competitive positioning and post-pandemic recovery. Basic-Fit demonstrates pricing power while competitors struggle with closures and halted expansion plans, indicating market share gains. The company's scale advantages enable lower construction costs and breakeven membership thresholds, creating sustainable competitive moats. This cost structure allows Basic-Fit to pursue aggressive pricing strategies that competitors cannot match profitably. New market entrants would face years of operating losses and significant brand-building investments to compete effectively. The manager's bullish outlook extends through 2024, suggesting confidence in continued execution and market expansion. The fitness industry consolidation appears to favor well-capitalized operators like Basic-Fit. This represents a high-conviction growth position benefiting from competitive dynamics and operational leverage.

Pitch Summary:
Griffon Corp. was one of the positions in client portfolios undergoing a strategic review whereby significant value could be realized through the sale of one of the business segments or the outright sale of the entire company. As the macro-economic environment continued to worsen, putting pressure on housing related activity, increasing costs of capital, and raising questions in my mind about receiving a fair valuation for the business, I reduced our position, moving it outside of our top five. In late April, Griffon announced the conclusion of the strategic review with no deal, explaining that the best path forward would be the ongoing execution of the business strategy. In conjunction with that announcement, Griffon also announced they would be returning a significant amount of capital to shareholders in the form of a $2.00/share special dividend and a $260mm buyback authorization, enabling them, at current prices, to repurchase around 15% of shares outstanding. With a refreshed Board, better capital allocation policies will be put in place and the company can now resume investor communication to help outline the strategic plan from here. As anticipated during our initial purchases, the dividend and our shares may serve as sources of cash for other investments over time.

BSD Analysis:
The manager reduced Griffon Corp. from a top-five position following concerns about fair valuation in a deteriorating macro environment affecting housing-related activity and rising capital costs. The strategic review concluded without a deal, but management announced significant shareholder returns through a $2.00 special dividend and $260mm buyback program representing approximately 15% of shares outstanding. The position shift reflects a neutral stance as the manager views the capital return program positively but remains cautious about the business fundamentals. With a refreshed board and improved capital allocation policies, the company is positioned to better communicate its strategic direction. The manager anticipates using dividends and potential share sales as funding sources for other investment opportunities. This represents a tactical repositioning rather than a fundamental thesis change. The housing exposure remains a concern given current macroeconomic headwinds.

Pitch Summary:
I've recently purchased for us two new investments and I'll briefly discuss one below: Matrix Services (MTRX) an Engineering & Construction (E&C) company that's adjacent to the hydrocarbon space. It bends metal, builds liquid and gas storage, conducts "turnaround" work at refineries, offers mining services and has an additional services business in electrical Transmission and Distribution. The company is currently trading around $5 / share. With 27M shares out, $15M in total debt and $32M in cash, this yields an enterprise value of $120M. Pre-COVID this was a $400M EV company. Industrial construction seems poised for a strong pipeline of work given needed infrastructure for "new" energy (hydrogen, biofuels, ammonia, etc.), deferred CAPEX in traditional energy and incremental N. American mining. This would support a rebound in MTRX's backlog while margin reversion to pre-COVID levels offers a pathway to profitability. The market is valuing the company on its present P&L, which is unattractive. E&C is one of the longest lagging industries and the company is still completing work booked during COVID, when pricing was aggressive. One larger project is losing money and construction accounting requires that when a contractor realizes it is in a loss position on a project, it must immediately recognize the entirety of that loss including expected future losses through completion. These charges were recognized in the most recent quarter ended 12/31/22 (FY2Q23). For the last six quarters book-to-bill has been at or above 1x. Management at MTRX and at other E&C's exposed to similar end markets talk about a robust pipeline of pending work supporting new and traditional energy. If MTRX is booking work near its historical margins as management says it is, this should unfold quite nicely for investors. The same management has been in place for over a decade; they've guided the company through prior cycles. The balance sheet is healthy and can support loss projects through completion. Random intangibles like weather can have material impact on the business, so this can be a frustrating industry to invest in. But the time to buy E&C companies is when the income statement is at its worst and backlog growth lies ahead. That defines the present opportunity.

BSD Analysis:
The manager identifies MTRX as a classic cyclical value opportunity in the engineering and construction space, trading at a significant discount to pre-COVID valuations ($120M EV vs. $400M previously). The investment thesis relies on the inflection point in industrial construction driven by new energy infrastructure needs (hydrogen, biofuels, ammonia) and deferred traditional energy capex. The company's book-to-bill ratio above 1.0x for six consecutive quarters indicates growing backlog, while management claims to be booking new work at historical margins. The current depressed valuation reflects temporary margin compression from COVID-era projects with aggressive pricing and one-time loss recognition. With experienced management, a healthy balance sheet ($32M cash, $15M debt), and exposure to both traditional and emerging energy markets, MTRX appears positioned for margin recovery as legacy low-margin projects roll off. The manager's contrarian approach of buying E&C companies when fundamentals appear worst but backlog growth lies ahead represents classic value investing discipline in a cyclical industry.

Pitch Summary:
I initially wrote about PESI in the 4Q19 letter. It pairs a fixed asset "scale" business – one of only three DOE contractors licensed to treat low level nuclear waste – with a services business comprised of engineers and folks-in-the-field with Tyvek suits and shovels. It is still run by the same CEO who was hired in 2017 to fix what was then a moribund business. He did, doubling sales from 4Q18's $49M ttm to $99M ttm at 3Q20. EBITDA peaked at $7M ttm in 2Q20. Pre-COVID it was on track for $150M sales which would reasonably support $12M in EBITDA. COVID heavily disrupted both services and treatment, with a notable slowdown in DOE waste transfers, but as work resumes, there is a long and wide opportunity pathway to achieving those levels. The "sizzle on the steak" comes from the potential to process waste by "grouting it" at the company's Perma-Fix Northwest facility, just outside the Hanford (WA) cleanup site. Recent exuberance around the stock is driven by a January 2023 "record of decision" and a March 2023 "final environmental assessment" for two different programs that would feed waste to this facility. One of these programs is expected to begin by the end of 2024. Delays have persisted for years and I think it's reasonable to anticipate more. No matter the timing, the potential could be large. As the CEO said on the 4Q22 conference call, discussing these opportunities: "To put this in perspective, this volume of waste would more than double the production of all of our plants combined on an annual basis. And given the fixed cost nature of our business, this could result in the very significant cash flows over the next 10-year period." Once the Hanford waste starts getting processed, an eventual price target of $30 isn't unreasonable.

BSD Analysis:
The manager presents a compelling turnaround story for PESI, highlighting the company's unique position as one of only three DOE-licensed nuclear waste treatment contractors. The investment thesis centers on the recovery from COVID disruptions and the significant upside potential from processing Hanford waste through the Perma-Fix Northwest facility. Management has demonstrated execution capability, doubling sales from $49M to $99M between 4Q18 and 3Q20, with EBITDA peaking at $7M. The recent regulatory approvals in January and March 2023 provide concrete catalysts for the Hanford opportunity, which could more than double production capacity. The fixed-cost nature of the business model suggests substantial operating leverage as volumes recover. While the manager acknowledges potential delays, the long-term value creation opportunity appears significant, supporting the $30 price target. The combination of defensive nuclear waste treatment assets and cyclical recovery potential creates an attractive risk-reward profile.

Pitch Summary:
However, while the fund maintains a significant investment in the economics of MSGE, I believe SPHR is the more attractively priced piece. In the spin, SPHR retained a 1/3rd stake in MSGE, resulting in SPHR owning ~0.5 shares of MSGE for every one share of SPHR. At market prices of $32 for MSGE and $30 for SPHR, the market is ascribing ~$14/sh. for the remainder of SPHR, or $490MM given 35MM shares outstanding. For this $490MM investment, we get 1) the Sphere development, 2) the MSG Networks equity, and 3) an estimated $200MM in cash, net of the recently announced sale of Tao and further capex and start up costs for the Sphere. Given the $2.2B construction cost for the Sphere, not to mention opex already spent developing content and the ~$500MM of prime Las Vegas Strip land LVS contributed to the project, the market is effectively valuing the Sphere at cents on the dollar before it even opens. I find this even more interesting given the recent string of positive news regarding the project. Last week, tickets for the Sphere's opening show with U2 sold out in a matter of days. SPHR and the band are now set to open the venue in late September with a run of 17 shows for a total of ~340,000 tickets. Further, I believe the shows have an average ticket price close to, if not greater than, $500. There is an exceptionally wide gulf then between the market, which seems to discount the very viability of Sphere as anything beyond a spectacular bust, and Sphere customers, who seem excited to pack the value at prices well ahead of national averages. To size the opportunity, if the Sphere's Vegas residency business is consistently booked, say three packed shows a week for 40 weeks a year, combined with just modest execution on advertising and owned attractions, I believe the Sphere can generate over $1B in sales and over $200MM in operating profits, which at 15x valuation would yield ~$100/sh. for SPHR including its MSGE stake. I believe there is room for reasonable upside to both profits and multiple if this occurs. However, I want to acknowledge that there are modestly higher risks to SPHR than MSGE: the project has yet to be opened and the business model is not proven, the MSG Networks term loan must be renegotiated by fall 2024, there could be cost overruns getting the Sphere ready to open, etc. The elevated execution risk gives me pause and impacts our sizing, but I believe we are being very well compensated for taking these risks. Further, I believe we have strong strong downside protection from our "cents on the dollar" purchase price for the Sphere and SPHR's remaining investment in the less risky MSG Arena and Rockettes businesses. I have substantially rotated our position from MSGE to SPHR, though we retain a large investment in MSGE on a look through basis.

BSD Analysis:
McIntyre presents a compelling asymmetric opportunity in SPHR, arguing the market is valuing the revolutionary Sphere venue at a fraction of its construction cost and potential. The manager's sum-of-the-parts analysis reveals the market is ascribing only $490MM to the Sphere development, MSG Networks, and cash combined, despite $2.2B in construction costs and prime Las Vegas Strip real estate. The investment thesis is bolstered by strong early demand signals, with U2's opening shows selling out rapidly at premium pricing averaging $500 per ticket. McIntyre's base case scenario of consistent booking (three shows weekly for 40 weeks) could generate over $1B in sales and $200MM in operating profits, implying significant upside to the current $30 share price. While acknowledging execution risks around the unproven business model and upcoming debt refinancing, the manager believes the "cents on the dollar" valuation provides substantial downside protection through the underlying real estate and MSGE stake.

Pitch Summary:
STHO is a recent spinoff of a liquidating portfolio from the STAR/SAFE merger. As a quick back story, STAR was a financial business and REIT that made some poorly timed investments prior to the Great Financial Crisis. The business and stock eventually recovered, and the company spent the bulk of the 2010s cleaning up the prior mess and searching for new business ideas. During this time, the company started a business focused on ground leases, which eventually was IPOed under ticker SAFE with STAR retaining a majority ownership in SAFE and operating as its third-party manager. As SAFE successfully executed and grew, the value of SAFE eclipsed that of all STAR's other assets and the decision was made to merge the entities and internalize the manager. However, a small portfolio of workout assets from STAR's prior businesses remained, and STAR spun these assets out prior to the merger to clean up SAFE's balance sheet. That portfolio of workout assets is STHO. However, complicating matters, the workout assets may have some capital needs, and STHO has agreed to effectively cover the cost of SAFE's internalized manager for the first three years, which means STHO has modest cash needs initially. As STAR had minimal assets beyond its significant holdings in SAFE, management decided to capitalize STHO with a small cash buffer and a significant number of SAFE shares. I believe STHO's odd structure has a resulted in an opportunity to buy an orphaned security at an attractive price. While STHO's history is convoluted, its current assets are straight forward. For every one share of STHO, we own one share of SAFE, $360MM in book value real estate, and $250MM in "effective" net debt. At current prices for STHO and SAFE, that implies STHO's NAV is ~$35/sh. compared to STHO's current price of $16. We have hedged some of our position by shorting SAFE shares, partially locking in this spread. Going forward, STHO plans to liquidate over the next four years, which at current prices implies an ~22% annualized yield. I believe there are a few ways in which our return could be better, and a few which could hurt us. First, STHO could return cash and/or SAFE shares earlier than expected. Second, the marks on STHO's liquidating real estate are old and could prove conservative. Almost half of STHO's liquidating real estate is its investment in 30 acres of waterfront Asbury Park real estate, a growing "hipster" area of the Jersey Shore I am familiar with and think has potential. Third, SAFE is a portfolio of low-risk leases with exceptionally long duration, which makes SAFE extremely sensitive to interest rates. If inflation comes under control and/or if the Fed must pivot as the economy weakens, I believe SAFE shares could rally significantly. However, STHO is modestly levered, and the liquidation could take longer than expected. Balancing these risks, the fund has built a modest position, but I could see increasing it going forward.

BSD Analysis:
McIntyre presents a compelling value opportunity in STHO, a recent spinoff trading at a significant discount to net asset value. The manager identifies STHO as an orphaned security resulting from the complex STAR/SAFE merger, creating a classic spinoff mispricing scenario. With STHO trading at $16 versus an estimated NAV of $35 per share, the investment offers approximately 22% annualized returns through the planned four-year liquidation timeline. The thesis is strengthened by the manager's local knowledge of the Asbury Park waterfront real estate holdings, which comprise nearly half of the liquidating assets and may be conservatively marked. The position is partially hedged through SAFE shorts, demonstrating sophisticated risk management. While execution risks exist around liquidation timing and leverage, the substantial discount to tangible assets provides meaningful downside protection in this special situation investment.

Pitch Summary:
D-Wave Quantum (QBTS): QBTS entered 2023 with substantial doubt about the company's ability to continue as a going concern due to its low cash balance and limited access to its equity line of credit due to the precipitous decline of its stock price. QBTS reported its Q4 2022 results while issuing lower than expected revenue guidance along with a new debt facility from its largest shareholder, PSP, to provide operating runway for at least a year based on current cash levels and burn. 180's stock was subject to a lockup agreement, so it was not able to trade or hedge this position until February 5, 2023. From the expiration of the lockup through the end of the quarter, QBTS decreased NAV by $0.08 per share, or $0.8 million.

BSD Analysis:
The manager faces significant challenges with D-Wave Quantum, which entered 2023 with going concern issues due to low cash balances and limited financing options. The company's precipitous stock decline restricted access to its equity line of credit, creating a liquidity crisis. Q4 2022 results included disappointing revenue guidance, further pressuring the stock. PSP, the largest shareholder, provided a new debt facility to extend the operating runway for at least one year based on current burn rates. The manager was constrained by a lockup agreement until February 5, 2023, preventing any trading or hedging activities during the most volatile period. Once the lockup expired, the position continued to decline, reducing NAV by $0.08 per share. The going concern qualification and dependence on shareholder financing highlight the precarious financial position. This represents a speculative technology investment where execution risks and capital requirements have created significant downside pressure. The quantum computing sector remains early-stage with uncertain commercialization timelines.

Pitch Summary:
Arena Group Holdings, Inc. (AREN): AREN continued to collapse in 2023 following the acquisition of Men's Journal financed by a new debt facility from B. Riley. AREN reported overall positive results for Q4 2022 and provided positive guidance for 2023, but investors remain concerned with the company's balance sheet and over $100 million of debt to B. Riley that matures at the end of 2023, along with increasing interest rates of the bridge loan used for the acquisition. Existing investors provided $11.5 million in a registered direct offering at $3.80 per share in the quarter. For the quarter, AREN decreased NAV by $0.47 per share, or $4.9 million.

BSD Analysis:
The manager faces significant challenges with Arena Group Holdings despite positive operational results. While AREN reported strong Q4 2022 results and provided positive 2023 guidance, the stock continued to decline due to balance sheet concerns. The company carries over $100 million of debt to B. Riley that matures at the end of 2023, creating a significant refinancing risk. The acquisition of Men's Journal was financed through a new debt facility, adding leverage at a time when interest rates are rising on the bridge loan. The registered direct offering at $3.80 per share provided $11.5 million in capital but likely at dilutive terms. The position represents the largest detractor to performance, reducing NAV by $0.47 per share or $4.9 million. The disconnect between operational performance and stock price reflects investor concerns about the company's ability to refinance its debt obligations. This appears to be a situation where fundamental improvements are being overshadowed by capital structure issues and market conditions.

Pitch Summary:
Intevac, Inc. (IVAC): IVAC continued its positive momentum from Q4 2022 when it announced a deal with Corning that could lead to at least $100 million in revenue over five years, if IVAC's tool is qualified successfully in 2023. IVAC is also exploring the use of its coating tools for applications outside of consumer electronics where Corning would have exclusivity with that level of purchasing. 180 sold ~29% of its position in IVAC at an average sale price of $7.08 per share. For the quarter, IVAC increased NAV by $0.08 per share, or $0.9 million.

BSD Analysis:
The manager maintains a bullish outlook on Intevac based on a significant partnership opportunity with Corning that could generate substantial revenue growth. The potential deal with Corning represents at least $100 million in revenue over five years, contingent on successful tool qualification in 2023. This partnership provides a clear catalyst and revenue visibility that could transform the company's financial profile. IVAC is also exploring applications for its coating tools beyond consumer electronics, with Corning having exclusivity at certain purchasing levels, indicating potential for market expansion. The manager took partial profits by selling approximately 29% of the position at $7.08 per share, demonstrating disciplined portfolio management while maintaining exposure to the upside. The position contributed $0.08 per share to NAV during the quarter. The qualification process in 2023 represents a key binary outcome that could unlock significant value. The partnership with a blue-chip company like Corning validates IVAC's technology and market position.

Pitch Summary:
Synchronoss Technologies, Inc. (SNCR): SNCR's stock started off 2023 increasing materially from its 2022 lows to over $1 per share before declining to $0.83 per share following its Q4 2022 earnings report that was below estimates. Subsequent to the earnings report, B. Riley Financial publicly issued a non-binding letter of intent to acquire SNCR for $1.15 per share. Diligence remained ongoing as of the end of Q1 2023. For the quarter, SNCR increased NAV by $0.17 per share, or $1.8 million.

BSD Analysis:
The manager's position in Synchronoss Technologies represents a classic value play with potential catalyst-driven upside. The stock recovered from 2022 lows to over $1 per share before retreating following disappointing Q4 2022 earnings. The key catalyst emerged when B. Riley Financial issued a non-binding letter of intent to acquire SNCR for $1.15 per share, representing significant upside from the $0.83 trading level. The manager's earlier reference to the market pricing SNCR at $0.50 per share at the end of 2022 highlights the extreme valuation dislocation. The acquisition offer validates the manager's thesis that the stock was severely undervalued. The ongoing diligence process creates uncertainty but also potential for deal completion or competing bids. The position contributed $0.17 per share to NAV during the quarter. This represents a turnaround situation where patient capital and value discipline are being rewarded through corporate activity.

Pitch Summary:
Alta Equipment Group, Inc. (ALTG): ALTG's stock began 2023 with a substantial increase in value into its earnings report for Q4 2022, with the stock closing at an all-time high of $19.86 on March 8, 2023. 180 sold ~92% of its position in ALTG in Q1 2023 for an average sale price of $17.58 per share. While ALTG reported strong results along with positive guidance and commentary that it has not seen any weakness in demand, ALTG's stock has since declined materially from its highs and from our average sale price. For the quarter, ALTG increased NAV by $0.18 per share, or $1.9 million. We will absolutely look to add to the stock on the weakness.

BSD Analysis:
The manager demonstrates strong conviction in Alta Equipment Group despite taking significant profits at elevated levels. ALTG reached an all-time high of $19.86 in March 2023, prompting the manager to sell approximately 92% of the position at an average price of $17.58 per share. The company reported strong Q4 2022 results with positive guidance and management commentary indicating no demand weakness. The manager's decision to sell near the peak while maintaining bullish conviction shows disciplined profit-taking. The subsequent material decline in the stock price from these highs presents a re-entry opportunity. The manager explicitly states intentions to add to the position on weakness, indicating confidence in the long-term fundamentals. The position contributed $0.18 per share to NAV despite the partial exit. The manager's reference to the stock trading at approximately 5x enterprise value to estimated FY23 EBITDA suggests attractive valuation metrics.

Pitch Summary:
Potbelly Corporation (PBPB): PBPB pre-announced strong results for Q4 2022, across all financial and shop-level metrics that exceeded expectations and guidance. PBPB also announced the refinancing of its short-term debt facility to a 5-year term loan. PBPB announced expansion plans in New York City with a new development agreement and its first refranchise deal. 180 sold ~11% of its position in PBPB at an average sale price of $7.91 per share. For the quarter, PBPB increased NAV by $0.42 per share, or $4.3 million.

BSD Analysis:
The manager maintains a bullish stance on Potbelly Corporation following strong Q4 2022 results that exceeded expectations across all key metrics. The company successfully refinanced its debt structure, extending a short-term facility to a 5-year term loan, which improves financial flexibility. PBPB's expansion strategy includes new development agreements in New York City and its first refranchising deal, indicating growth momentum. The manager took partial profits by selling approximately 11% of the position at $7.91 per share, demonstrating disciplined portfolio management. The position contributed significantly to performance with a $0.42 per share NAV increase. The manager's reference to laughing at investors who sold PBPB at $4.50 suggests strong conviction in the long-term value proposition. The stock's nearly 100% appreciation from those levels validates the investment thesis.

Pitch Summary:
The worst detractor in Q1 was Leatt Corp. I highlighted my long thesis for Leatt Corp. (Leatt) in our Q4 Investor Letter, which you can find on our website, http://www.deepsailcapital.com. Leatt reported worse than expected revenue growth and net income in their Q4 earnings, which drove the stock down significantly. Leatt reported Q4 revenues of just $10.9m which was 53% below their 2021 Q4 revenues, and a Q4 net income loss of $1.1m. The major concern of mine with my investment in Leatt was always the short-term industry weakness in the Moto and MTB sectors. COVID had a large positive impact on both the Moto and MTB sectors. COVID pulled forward some demand for new equipment, which has now completely rolled over. With Leatt's launch of their 360 turbine technology helmets in Q1 of 2022, I believed that helmet category penetration would help offset the declines in overall sales volumes, as was largely the case for all of 2022 until Q4. Helmet volumes clearly helped Leatt's business in 2022, with overall growth of 60% year over year, but that wasn't enough to fully offset a decline in the neck brace and body armor product categories in Q4. Overall, I believe the long thesis is still intact, and most of the declines have more to do with industry dynamics than Leatt specific issues. In Q1, we added to our position in Leatt and plan to continue to hold it going forward.

BSD Analysis:
The manager maintains a bull stance on Leatt Corp despite significant Q4 2023 underperformance, viewing recent weakness as industry-driven rather than company-specific. The investment thesis centers on Leatt's innovative 360 turbine technology helmets launched in Q1 2022, which drove 60% overall growth in 2022 through helmet category penetration gains. However, Q4 results showed the limits of this strategy, with revenues declining 53% year-over-year to $10.9 million and a $1.1 million net loss, as helmet growth couldn't offset declines in neck brace and body armor categories. The manager acknowledges the core risk of COVID demand pull-forward in motocross and mountain biking sectors, which has now reversed. Despite the poor results, the manager added to the position in Q1 2023, demonstrating conviction that the long-term thesis remains intact. The investment appears to be a contrarian bet on industry recovery and Leatt's technology differentiation, though near-term headwinds from normalized post-COVID demand patterns present ongoing challenges.

Pitch Summary:
Mercado Libre is an internet, technology, and payments company that services Latin America. Mercado Libre went public in 2007. Since the IPO, the company has grown from an eBay-like clone geared towards Latin America to a full suite of e-commerce, shops, payments, and logistics. Mercado Libre is a unique company that might be best described as 1/3 Alipay, 1/3 eBay, and 1/3 Amazon of Latin America (Latam). Aside from that, Mercado Libre is essentially Latin America's sole e-commerce and internet behemoth. Latam has lagged the rest of the world, especially compared to North America, in terms of adoption of the internet, e-commerce, and investment in internet startup companies for the last 15 years. But that adoption has accelerated in the last 5 years. Specifically, in the last 3 years, the Latam VC landscape has exploded, with a multitude of new Latam startups emerging to service the growing internet users of the region. Many of these startups were founded by former Mercado Libre employees. I mention this to highlight the key position that Mercado Libre holds within the Latam market; it provides the payments, logistics, and credit that allow these startups to scale. Mercado Libre's business is broken into six verticals: Mercado Libre (marketplace), Mercado Envios (logistics), Mercado Shops, Mercado Pago (payments), Mercado Credito (credits), and Mercado Ads. While the overall business is still running at extremely high growth rates (+40% yoy) even after some deceleration post-COVID, the most exciting part of the business for me is Mercado Pago, the payments segment. Mercago Pago is a payment system modeled after the successful Chinese payment system Alipay. Mercado Pago recently focused on expanding payments off the Mercado Libre exchange. It has seen its off-exchange payment volumes grow by 122% in the 3Q to $21 billion. This off-exchange payment growth is just beginning. Coupling the payments business with Mercado Libre's high-moat businesses in Marketplace and Logistics sets Mercado Libre up to be the backbone of commerce in Brazil, Mexico, and other Latam countries for many years to come. Mercado Libre's product segments all have adjacent network effects. If a user uses one of their products, then using a second product within Mercado Libre is more valuable for that user. For example, Mercado Logistics drives logistics revenues but also provides its Mercado Shops or Marketplaces with an easy way to ship and deliver products to customers. Mercado Pago's payments system is the interconnecting tissue that binds merchants and customers both on and off of their platform. Mercado Pago is used for not only payments but has extended into investments, savings, credit, and other financial services. Engagement in one vertical can quickly extend to other verticals, as you can see by the progression of revenues in each of their major markets and verticals over the last three years. Mercado Libre has built its business in a similar fashion to how Amazon has built its business, but a key distinction is that Mercado Libre has been able to grow into broader verticals than Amazon. This was largely due to the lack of competition in Latam eCommerce over the last 20 years. Marcos Galperin is the founder, chairman, and current CEO of Mercado Libre. Galperin founded the company in 1999 while attending Stanford University to get his MBA. Galperin is exactly what I look for in an outstanding manager. He has some skin in the game, as he still owns about 10% of the company through the Galperin Trust and his own equity. Dis brother is highly involved in the oversight of the company as a board member while at the same time taking no board compensation. Galperin has built a culture at Mercado Libre that is entrepreneurially driven and technology-first. Historically, Galperin has shown great skill in managing through difficult times, including through the tech bubble burst in 2000, the GFC in 2008, and extensive geopolitical stress in Latam countries over the last 20 years. He has been able to take on eBay and Amazon in Latam and remain the market leader in eCommerce. Mercado Libre has built its own logistics network in response to entrants like Amazon and Sea, which are pushing heavily into Brazil and Mexico. Outside of Galperin, the CFO, Pedro Arnt, has a long tenure with Mercado Libre. He has been with the company since 2000 and the CFO since 2011. Galperin and Arnt have a long track record of successfully executing on their stated strategy. Mercado Libre generates two types of revenue: commerce and fintech. Commerce is your traditional e-commerce revenues from marketplaces and product sales, while fintech revenues are from newer segments like payments, point of sale systems, financial services, and other financial products. Commerce revenues have been growing consistently in the mid-20s to mid-30s since COVID started, similar to other e-commerce companies. Fintech revenue has been growing at a high rate for the last few years, around 80–100%, driven by their expansion in their payments offering. Mercado Pago's off exchange growth aligns well with the rise of the PIX system in Brazil. PIX is an electronic payments system in Brazil that allows consumers to pay directly from a bank account for all sorts of goods. For those not familiar with the Brazilian PIX system, here is a quick primer (Pix: Brazil). While competition has been entering their markets, specifically Amazon and Sea, Mercado Libre still sits as the sole eCommerce giant in Latam. They are in the driver's seat to shape the face of eCommerce in Latam in the near term, and I expect them to continue to expand into adjacent verticals over time and leverage their central role in e-commerce to provide additional services to the next generation of Latam startups. Mercado Libre has seen improving financial metrics alongside fast growth and moderating capital expenditures since the middle of 2021. 2021 was a key turning point for them, as their capex peaked after they ramped up capex to help build out their logistics network in 2018–2019. While continued investment is needed to further build out their logistics networks in other countries outside of Brazil and Mexico, I expect more cash to flow to the bottom line in the years to come as a percentage of revenue than in the last 5 years. Mercado Libre is currently growing revenues on a FX neutral basis at 58% y-o-y, or 40% y-o-y adjusting for FX. Margins and cashflow have materially improved since they started to reduce the amount of quarterly capex spend in late 2021 (logistics-driven). Consensus estimates are currently forecasting $3.4B of EBITDA and $2.8B of EBIT in 2025. I believe those are likely conservative forecasts, but even on that basis, Mercado Libre is trading at an 18x 2025 EBITDA multiple and a 22x 2025 EBIT multiple. Considering where Mercado Libre sits in the e-commerce ecosystem, I view their valuation as high but justified.

BSD Analysis:
The manager presents a comprehensive bull case for Mercado Libre as Latin America's dominant e-commerce and fintech platform. The thesis centers on the company's unique positioning as a combination of Alipay, eBay, and Amazon for the Latin American market, with six integrated business verticals creating powerful network effects. The manager highlights the explosive growth in Mercado Pago's off-exchange payment volumes (122% growth to $21 billion), positioning it as the most exciting segment with significant runway ahead. Strong management under founder-CEO Marcos Galperin, who owns 10% of the company and has successfully navigated multiple crises over 20+ years, provides execution confidence. The company is generating 40% revenue growth while improving margins and cash flow as capital expenditure moderates from peak logistics investment. At 18x 2025 EBITDA and 22x 2025 EBIT, the manager views the valuation as high but justified given the company's dominant market position and growth prospects. The investment benefits from Latin America's accelerating digital adoption and Mercado Libre's role as infrastructure provider for the region's emerging startup ecosystem.

Pitch Summary:
Approximately 14% of our portfolios are in Treasury Bills. Given that we are in a volatile and unpredictable environment we would like to preserve that 14% so that we can be offensive if the right opportunities present themselves. In order to buy RTO and add to CP we needed to sell something, and we chose to sell GOOGL. We have owned GOOGL since 2014 and it has been a great investment for us. Our original thesis was essentially that GOOGL dominated the internet and was poised to grow in search and through YouTube for years. The landscape is very different for GOOGL today vs. in 2014. The company is more mature which makes it less recession resistant. In the past GOOGL was a secular grower and could easily growth through a downturn. Today they have such a large share of advertising dollars and an economic slowdown will have a greater impact on their growth. When we purchased GOOGL they had about 54,000 employees. They hired 72,000 people in the last 2 years and today they have about 178,000 employees. What do all these people do? Meanwhile, GOOGL's monopoly is at risk. They are reliant on Apple to have Google search as the default on iPhones. Amazon is now a competitor in the ad business, Microsoft has the potential to be more competitive with their integration of ChatGPT, and ChatGPT itself and other AI applications have the potential to take eyeballs away from Google. If that is not enough, the DOJ is coming for Google, and if they are successful, it will further weaken Google's position. It is not the end of the world for GOOGL. We still expect them to dominate search, they should be able to fix their cost structure, and the multiple on the stock is not demanding. However, we think there are better stocks to own for the long term.

BSD Analysis:
Brasada exited their long-held Google position after nearly a decade of ownership, citing fundamental changes in the company's competitive position and growth profile. The manager's original thesis of internet dominance through search and YouTube remains intact, but Google's maturation has reduced its recession resistance and secular growth characteristics. Massive employee expansion from 54,000 to 178,000 workers raises questions about operational efficiency and cost structure discipline. The competitive landscape has deteriorated significantly with Amazon's advertising growth, Microsoft's ChatGPT integration, and emerging AI threats to search traffic. Regulatory pressure from the DOJ adds another headwind to Google's monopolistic position, while dependence on Apple for iPhone search default creates vulnerability. Despite acknowledging Google's continued search dominance and reasonable valuation, Brasada views the risk-reward profile as less attractive than other opportunities. The sale reflects portfolio management discipline rather than a bearish view, as proceeds were redeployed into higher-conviction positions.

Pitch Summary:
We have owned CP for about 2 years and we increased the size of our position during the quarter. On March 15th, the Surface Transportation Board (STB) approved CP's merger with Kansas City Southern (KCS). This was the first Class 1 Railroad merger since Canadian National acquired Illinois Central in 1999. This will also be the last major railroad merger as any future combinations would not be able to gain approval from the STB. CP/KCS will be the only single-line railway connecting Canada to Mexico. It creates new rail options for shippers, and the company expects it to shift 64,000 truckloads from road to rail. Keith Creel is the CEO of CP and he actually worked at Illinois Central when it was acquired by Canadian National. Creel is the protégé of Hunter Harrison, who was the Bill Walsh of railroading. Just as Walsh created the famous West Coast offense. Harrison created Precision Scheduled Railroading (PSR) and implemented it at several Class I railroads. Creel was with Harrison at Illinois Central, Canadian National, and he succeeded him as CEO at CP. CP has thrived under Creel's leadership, and we believe there is an enormous amount of value that he can create with KCS.

BSD Analysis:
Brasada increased their existing CP position following regulatory approval of the transformative Kansas City Southern merger, creating the only single-line railway connecting Canada to Mexico. This represents the first Class 1 railroad merger in over two decades and likely the last given regulatory constraints, providing CP with a unique competitive moat. The combination should generate significant value through modal shift, with management expecting 64,000 truckloads to convert from road to rail annually. CEO Keith Creel brings exceptional pedigree as a protégé of legendary railroad operator Hunter Harrison, the architect of Precision Scheduled Railroading methodology. Creel's proven track record implementing PSR across multiple railroads, combined with his successful leadership at CP, positions the company to unlock substantial value from the KCS integration. The merger creates new shipping options and operational efficiencies that should drive long-term earnings growth. Brasada views this as a rare opportunity to benefit from industry consolidation with best-in-class management execution.

Pitch Summary:
Rentokil Initial (RTO) is a UK based company that has pest control operations all over the world. They acquired Terminix on October 12, 2022. Prior to the Terminix deal RTO was the #3 pest control company in the US and approximately 44% of their sales were in North America. Today they are the #1 pest control company in the US and in the world. Almost 70% of sales are in the US. Regarding the pest control mix about 60% of pest control sales are residential, while about 40% are commercial, which by nature has lower customer churn. Rollins (ROL) is considered the best operator in the industry, and Rentokil is considered a good operator but not on the level of ROL. Terminix was considered poorly run for years due to multiple CEO and strategy changes in a short amount of time. The pest control industry is fragmented globally and in the US. RTO and ROL are the top two players in the US and after that there are hundreds of smaller regional players. RTO and ROL are acquisitive but aside from the Terminix deal most deals are tuck in type deals that have high IRRs and are very accretive. The pest control business is recession resistant. If you have roaches or in my case wasps in your house and you cannot get rid of them yourself, you are going to call an exterminator. If a restaurant or grocery store has a rat or roaches in the restaurant, they are going to be out of business fairly quickly. On their recent Q4 call ROL said that the market has the opportunity to grow mid to high single digits. Terminix has had a number of leadership changes in recent years. I recently spoke with an executive at ROL and he told me he didn't even know anyone there anymore. Brett Ponton became the most recent CEO of Terminix in September of 2020. He joined the company from Monro Muffler and had no pest control experience. In a recent interview with Potomac M&A Tony DiLucente the former CFO of Terminix from 2017 to 2021 said "There were a lot of distractions during my tenure. Let's face it, I had four CEOs that I worked for in four years. When I think of why we're underperforming from an organic growth standpoint is we had too much turnover at the very top. To me, that's the number one root cause. We've done some good things in the time I was there. I'm proud of what we've done but we could have done more if we had a little bit more consistency at the top." John Myers built the RTO US pest control business from scratch and has been at RTO since 2008. Andy Ransom has been CEO of RTO since 2013 and he has done a fantastic job of growing RTO globally. We believe RTO is going to bring stability to Terminix, which is something Terminix desperately needs. RTO should be able to improve customer attrition, reduce technician turnover, and be more efficient with marketing spend. RTO has said that there will be at least $200M of synergies in 3 years. 50% of the cost savings will come from closing branches that overlap. ROL trades at 28X 2023E EBITDA and about 36X 2023E FCF. RTO trades at 14X 2023E EBITDA and 25X 2023E FCF. While we do not expect RTO to achieve the multiple of ROL, we do think that it is undervalued. We think that the multiple will expand as investors become more aware of the company, and as they make progress with Terminix.

BSD Analysis:
Brasada initiated a position in Rentokil Initial following its transformative acquisition of Terminix, which elevated RTO to the #1 global pest control position. The manager's thesis centers on RTO's ability to stabilize and improve Terminix's historically poor operations, which suffered from excessive CEO turnover and inconsistent strategy. The pest control industry offers attractive defensive characteristics with recession-resistant demand and fragmented market structure conducive to consolidation. RTO's experienced leadership team, including CEO Andy Ransom since 2013, contrasts sharply with Terminix's instability and should drive operational improvements. The manager expects at least $200M in synergies over three years, primarily from branch consolidation, while also improving customer retention and technician turnover. At 14x 2023E EBITDA versus Rollins' 28x multiple, RTO appears significantly undervalued despite being a lower-quality operator. The investment thesis relies on multiple expansion as RTO demonstrates successful Terminix integration and operational improvements.