Fog City adheres closely to the following investment criteria:

• Middle-Market Companies. Companies with revenues between $10 million and $100 million. We are willing to look at companies with low or negative profitability.

• Established Industries. Companies in these industries have experienced management teams, market-accepted services or products and operating history.

• Software and Technology Enabled Business Service Firms. Target companies will have a minimum of 3 years’ operating history. These companies will provide servicesor technology to businesses (from small enterprises to Fortune 100 corporations) that are embedded in clients’ operations.

• High-Quality Revenue Base, Variable Cost Structure. Companies will have a solid revenue base with a high percentage of recurring revenues and high customer switching costs. Fog City will avoid businesses with significant recurring capital requirements.

• Opportunity to Improve Operations. Fog City will look for companies where operations and financial performance can benefit from our team's expertise.