## DESCRIPTION OF THE BUSINESS AND OPERATIONS 

## Our Business 

We are a Canadian company that provides alternative financing to a diversified range of profitable, well- managed private businesses in North America. We use an innovative financing structure that allows us to provide capital in a manner that maximizes valuations, is tax effective and allows existing owners of the private companies to retain control of their businesses. Our primary objective is to generate predictable, stable cash flows from our Private Company Partners to allow us to provide an attractive yet stable yield as well as liquidity to our investors. 

## Our Structure 

We provide cash financing to private companies at an agreed upon valuation, in exchange for a pre- determined distribution or royalty from such private companies. Our Distribution is received monthly but is determined twelve months in advance in accordance with a mutually agreed upon performance metric which is based upon a “top-line” financial performance measure of a Private Company Partner, such as gross revenues, gross profit, same store sales, same clinic sales and same customer net sales. Each year, our Distribution is adjusted based on the percentage change in the audited performance metric. In keeping with our business objective of generating predictable, stable cash flows, our Distribution is only based on organic growth and/or organic decline of the private company. As such, any growth or decline in the private company from acquisitions, new locations or margin improvements do not get factored into such adjustment for a period of time (typically 12-24 months). 

Our Distribution ranks in priority to the Private Company Partner’s common equity. In addition, the Distribution is paid by the Private Company Partner out of earnings before taxes, making the after-tax cost of our financing attractive to our Private Company Partners. Our financing structure is characterized as equity, and as a result, principal payments of our financing are not required. 

We do not have any significant influence over any of our Private Company Partners nor do we have any ability to exercise control over the Private Company Partners. In most cases, we do not have any voting rights over the Private Company Partners, and where we do have voting rights, we have only a small percentage of the votes (less than 15%).We do not have any significant ability to participate in management decisions and are not involved in the day-to-day operations of the Private Company Partner within the normal course of business. However, we do require Private Company Partners to provide us with monthly (unaudited) financial statements so we can monitor their financial health, as well as annual (audited) financial statements. Although we generally do not have any significant voting rights, we have strong protective covenants in place with our Private Company Partners to protect our Distributions and typically require our prior consent on a number of items outside of the ordinary course of business, such as: 

GLYPH<g120> Any material change in business of the company 

GLYPH<g120> Material acquisition or divestiture 

GLYPH<g120> Incurring new debt over predetermined levels, or any material change to existing debt facilities 

GLYPH<g120> Entering into non-arm’s length transactions above prescribed levels 

GLYPH<g120> Mergers or corporate reorganizations 

GLYPH<g120> Extraordinary capital expenditures 

