Fellow Investors,

We finished the first quarter of 2024 outpacing our benchmark, despite our unwillingness to own Nvidia, Dogecoin, NFTs, and the like. We continue to believe our advantage lies in vetting ideas most ignore, as opposed to predicting the “next big thing.” It was a difficult quarter to feel good about that approach, but we expect it will continue to serve us as well as it has through our first nine quarters.

Kingdom Capital Advisors (KCA Value Composite) returned 7.51%(net of fees)in the first quarter, vs. 5.18%for the Russell 2000 TR, 10.56% for the S&P 500 TR, and 8.72% for the NASDAQ 100 TR.

Q1 ended on a high note but felt like a slog. Nothing better illustrates the volatility of the past few months than the emotional roller-coaster that was Children’s Place (PLCE). After a Bloomberg leak in February revealed the company was facing insolvency, we felt fortunate to exit the position around $17/share that evening. The stock opened at $8/share the following day and we were glad to have “cut bait” the moment we learned our investment thesis was broken. We felt less fortunate a few days later when a Saudi family office purchased 54% of the float and extended an interest-free emergency loan to the business, briefly pushing the stock to $38/share. All told, in ~15 months of owning stock in various sizes, we generally broke even across client accounts. Obviously, we anticipated a much better investment outcome; however, we are happy to exit without loss of principal given our misjudgments about the Company’s ability to execute. We wish the new owners much success turning around the operation.

Our top contributors to Q1 returns were Net Lease Office Properties (NLOP), Hanesbrands (HBI), Tidewater (TDW), and Abacus Life (ABL & ABLLW) while Corsa Coal (CRSXF) and Regis Corporation (RGS) were our largest detractors.

Positioning Updates

Beyond PLCE, there was substantial churn in the portfolio during Q1 as we established new positions in stocks like Regis Corporation, Tidewater, Venator Materials (VNTRF), GEN Restaurant Group (GENK), and Hanesbrands. Frankly, the current opportunity set is rich, and we chose to trim and close some positions as we seek to consolidate into ideas with significant torque.

One idea we have yet to discuss publicly is Entravision (EVC), to which we made a significant allocation in March. A large contract loss from Meta drove shares down over 50%, allowing us to buy stock in the following at an implied value of $250m:

1. Remaining digital business likely worth $50-150m

2. Two legacy operating units with market value >$250m

3. Incoming deluge of 2024 political ad spending

4. Spectrum assets likely worth >$1B in a future FCC auction

5. A 13% dividend yield while you wait for #4

6. A CEO who needs to ~10x the stock price to vest all his equity awards

7. No active shareholders or meaningful public discussion of the opportunity

We have confidence in EVC’s ability to continue generating cash in the current climate and believe shares will trade higher once the company communicates their go-forward strategy to the market. We hope they choose to divest the remaining digital assets to focus on the company’s legacy cash cows (TV and Radio operations), which should have significant interest.

We posted a nice Q1 gain in Hanesbrands. We increased our allocation when the stock dipped after their Q4 earnings report and rode a wave of subsequent speculation on their potential divestiture of the Champion brand. A purported sale price of $1B was recently leaked and the market has thus far been underwhelmed. Regardless, the market affirmed that $4/share wasn’t the right price after the earnings sell-off.

Lastly, we called out Net Lease Office Properties in our last letter stating, “investors will be pleasantly surprised as locations are liquidated in the coming months.” Well, unlike most of our positions, this one quickly made us look good by announcing four sales at prices higher than we anticipated. The company subsequently sold another property and secured lease extensions on 5 of their 54 remaining locations. This all came to fruition in their first partial quarter of operations since the spin-off from W.P. Carey.  The company has yet to liquidate their most valuable assets, so we are looking forward to crystallizing the valuation of their holdings. One director purchased $50k of stock in the open market in March, providing a vote of confidence that the eventual outcome will be positive.

Business Update

I had a great time attending the ICR Conference in Orlando in January, which I credit for surfacing GENK and other recent portfolio additions. We have been grateful for an influx of new capital to start the year, the most since our initial launch in 2022. Thank you for trusting us to steward your funds wisely. As always, reach out with any questions.

Sincerely,

David Bastian

Chief Investment Officer

DISCLOSURES

This document is not an offer to invest with Kingdom Capital Advisors, LLC (“KCA” or the “firm”).

The statements of the investment objectives are statements of objectives only. They are not projections of expected performance nor guarantees of anticipated investment results. Actual performance and results may vary substantially from the stated objectives. Performance returns are calculated by Morningstar.

An investment with the firm involves a high degree of risk and is suitable only for sophisticated investors. Investors should be prepared to suffer losses of their entire investments.

Certain information contained in this document constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “intend,” “continue” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the firm described herein may differ materially from those reflected or contemplated in such forward-looking statements.

This document and information contained herein reflects various assumptions, opinions, and projections of Kingdom Capital Advisors, LLC (“Kingdom Capital Advisors” or “KCA”) which is subject to change at any time. KCA does not represent that any opinion or projection will be realized.

The analyses, conclusions, and opinions presented in this document are the views of KCA and not those of any third party. The analyses and conclusions of KCA contained in this document are based on publicly available information. KCA recognizes there may be public or non-public information available that could lead others, including the companies discussed herein, to disagree with KCA’s analyses, conclusions, and opinions.

Upon request, KCA will furnish a list of all prior securities discussed in our publications within the past twelve months to include the name of each security discussed, the date and nature of each discussion, the market price at that time, the price at which the KCA acted upon the discussion (if at all), and the most recently available market price of each security.

Funds managed by KCA may have an investment in the companies discussed in this document. It is possible that KCA may change its opinion regarding the companies at any time for any or no reason. KCA may buy, sell, sell short, cover, change the form of its investment, or completely exit from its investment in the companies at any time for any or no reason. KCA hereby disclaims any duty to provide updates or changes to the analyses contained herein including, without limitation, the manner or type of any KCA investment.

Positions reflected in this letter do not represent all of the positions held, purchased, and/or sold, and may represent a small percentage of holdings and/or activity.

The S&P 500 TR, Russell 2000 TR, and NASDAQ 100 TR are indices of US equities. They are included for information purposes only and may not be representative of the type of investments made by the firm. The firm’s investments differ materially from these indices. The firm is concentrated in a small number of positions while the indices are diversified. The firm return data provided is unaudited and subject to revision.

None of the information contained herein has been filed with the U.S. Securities and Exchange Commission, any securities administrator under any state securities laws, or any other U.S. or non-U.S. governmental or self-regulatory authority. Any representation to the contrary is unlawful.

This information is strictly confidential and may not be reproduced or redistributed in whole or in part.