Fundamental takes the Eventide Asset Management approach to establishing an investable universe and evaluating companies.

The approach can be understood as a branching tree, where towards the core (or the "trunk") we have more philosophical components, and as we branch, the components become more practical and objective (e.g. "positive free cash flow" etc). At the heart of the philosophy, we maintain that we are doing "Investing that makes the world rejoice ®".

The whole of the analysis is focused on determining A) a company's long-term competitive advantage and B) its impact on human flourishing. Both of these aspects have varying degrees of quantitative and qualitative considerations within them.

Long-term competitive advantage is assessed using Financial Analysis and by investigating more Qualitative Traits.

1. Sentiment

   • Social sentiment
   • 13F filings: hedgefunds and super-investors often invest contrary to social sentiment

2. Leading Indicators

   • Macroeconomic headwinds
   • Macroeconomic tailwinds

3. Valuation

   • Attractive Income Generation
   • Consistent and Repeatable Revenue and Earnings Growth
   • Stable Business Model
   • Stable or Increasing Operating Margins
   • Strong Balance Sheet
   • Positive Free Cash Flow

   Reinforced by Discounted Cash Flow (DCF) analysis to determine intrinsic value

1. Sustainable Competitive Advantage
2. Attractive Industry
   • Secular growth trends
3. Great Management Teams
4. Creation of Compelling Value

The Impact on Human Flourishing is assessed as an analysis of what a company makes and how they make it. We can frame these two ideas as an examination of Good Products and Good Practices.

Products and services that:

Companies are automatically disqualified if they derive significant revenue (>5%) from:

• Tobacco products and related industries
• Gambling and gaming operations
• Adult entertainment
• Weapons manufacturing (non-defense)
• High-interest consumer lending (payday loans, etc.)
• Alcohol production and distribution
• Private prison operations
• Animal testing for non-medical purposes
• Single-use plastics manufacturing
• Fast fashion with poor labor practices

1. Develop Creation

   • Products enhance the world (1-5)
   • Innovation drives positive change (1-5)

2. Sustain Creation

   • Products maintain the world (1-5)
   • Products protect the world (1-5)

3. Restore Creation

   • Products fix brokenness (1-5)
   • Products heal brokenness (1-5)

Good Practices can be defined as service to customers, employees, suppliers, communities, the environment, and society:

1. Customers
   • Are customers being served well?
2. Employees
   • Do employees have good jobs?
3. Suppliers
   • Are suppliers valued as strategic partners?
4. Host Communities
   • Are communities better off for the company's presence?
5. Environment
   • Is the environment being cared for and protected?
6. Society at Large
   • Is the world made better for this company's existence?

Critically, we believe that businesses that create value for society are best positioned for long-term outperformance. We want to partner with companies who are creating compelling value for the global common good.

1. Sentiment

   • Social sentiment analysis (1-5)
   • 13F filings analysis (1-5)

2. Leading Indicators

   • Macroeconomic headwinds assessment (1-5)
   • Macroeconomic tailwinds assessment (1-5)

3. Valuation

   • Attractive Income Generation (ROIC > WACC)
   • Consistent Revenue Growth (last 3 years)
   • Consistent Earnings Growth (last 3 years)
   • Stable Business Model (last 3 years)
   • Stable or Increasing Operating Margins (last 3 years)
   • Strong Balance Sheet (debt-to-equity ratio < 1.0)
   • Positive Free Cash Flow (last 3 years)
   • DCF Analysis indicates undervaluation

• Sustainable Competitive Advantage (1-5)
• Attractive Industry with Secular Growth Trends (1-5)
• Great Management Team (1-5)
• Creation of Compelling Value (1-5)

Products and services that:

1. Develop Creation

   • Products enhance the world (1-5)
   • Innovation drives positive change (1-5)

2. Sustain Creation

   • Products maintain the world (1-5)
   • Products protect the world (1-5)

3. Restore Creation

   • Products fix brokenness (1-5)
   • Products heal brokenness (1-5)

Service to key stakeholders:

1. Customers

   • Customer satisfaction metrics (if available)
   • Customer service quality (1-5)
   • Customer value creation (1-5)

2. Employees

   • Employee satisfaction metrics (if available)
   • Employee treatment and benefits (1-5)
   • Career development opportunities (1-5)

3. Suppliers

   • Supplier relationship quality (1-5)
   • Fair trade practices (1-5)
   • Supply chain ethics (1-5)

4. Host Communities

   • Community impact assessment (1-5)
   • Local economic contribution (1-5)
   • Community engagement (1-5)

5. Environment

   • Environmental impact score (if available)
   • Environmental stewardship (1-5)
   • Sustainability initiatives (1-5)

6. Society at Large

   • Societal contribution (1-5)
   • Global common good impact (1-5)
   • Ethical business practices (1-5)

1. Initial Screening: Company must pass all objective financial criteria
2. Qualitative Assessment:
   • Average score across all 1-5 metrics must be ≥ 4.0
   • No single metric score < 3
   • At least 3 metrics must score = 5
3. Final Review:
   • Management Team Quality must be ≥ 4
   • At least one "Good Products" category must score ≥ 4
   • At least three "Good Practices" categories must score ≥ 4

Note: This checklist serves as a framework for initial evaluation. Additional due diligence and research may be required for final investment decisions.