THANKS FOR YOUR INTEREST IN GadgetFix® › shared › listings › 172 › 1724358 › ed259… · The mobile device market includes mobile phones, smart phones, notebooks, tablets,

THANKS FOR YOUR INTEREST IN GadgetFix®

RETAIL STORES - (www.GadgetFix.repair) GadgetFix RETAIL includes 30 locations (https://www.Gadgetfix.repair) and has been around for more than 16+ years in

Oklahoma, Washington, Oregon, and Arkansas. With 8 retail locations doing almost $20 MM per year, they’ve fixed over 500k

devices and generated HUNDREDS of million in sales. They are not only a trusted name in the Phone Repair industry but have

developed training and software tools that if utilized properly would revolutionize the repair industry.

FOR SALE: $6M ALL IN (Low Multiple, High Value)

Equity available: 100%

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CONFIDENTIAL INFORMATION MEMORANDUM

www.gadgetfix.repair

The Confidential Information Memorandum ( the” Memorandum”) is provided to you in your capacity as a potential party to a Transaction. Your receipt of this

document evidences your understanding and consent to the following:

This Memorandum contains confidential information regarding the Company (the “Confidential Information “ ). The existence of the Memorandum itself shall be

deemed confidential. By accepting this Memorandum, the recipient agrees that it (i) will cause its directors, officers, employees, attorneys, accountants, Financial

advisors and representatives who are assisting in the evaluation of the proposed Transaction to use the Memorandum and such Confidential Information only to

evaluate such Transaction, and for no other purpose, (ii) will not divulge any such Confidential Information to any other party in any way or form whatsoever, and (iii)

shall return this Memorandum to the Company upon request thereof.

Neither this Memorandum nor the Confidential Information herein is, in whole or in any part, to be reproduced, disclosed to any other person, or used for any purpose

other than in your capacity as a potential party to a Transaction and as set forth herein. This Memorandum and the Confidential Information contained herein are

proprietary, sensitive and confidential, and you must ensure their treatment as such by each person who assists you in your evaluation with whom you share the

Confidential Information in accordance herewith. Release of Confidential Information to any other persons could be damaging to the Company.

The information contained in this Memorandum was obtained from the Company and other sources. Any estimates or projections contain herein have been prepared by

management of the Company and involve elements of subjective judgment and analysis that may or may not prove to be accurate. While the information included

herein is believed to be reliable, the Company by delivery of the Memorandum, does not make any representations or warranties, expressed or implied, as to the

accuracy or completeness of such information. The Memorandum does not purport to contain all of the information that may be required to evaluate a Transaction, and

any recipient hereof should conduct its own independent analysis of the Company and the data contained or referred to herein. In furnishing this Memorandum, the

Company reserves the right to amend or replace this Memorandum at any time, but undertake no obligation to update, correct or supplement any information contained

herein or to provide the recipient with access to any additional information. All communications pertaining to this Memorandum, requests for additional information,

or inquiries relating to a possible Transaction should be directed to the individuals on the final page.

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WWW.GadgetFix.COM

CONFIDENTIAL INFORMATION MEMORANDUM

TABLE OF CONTENTS:

Cover Page ……………………………… Page 1

Confidentiality Information Agreement… Page 2

Table of Contents……………………….. Page 3

Industry At A Glance……………………. Page 4

Company At A Glance …………………. Page 5

Investment Highlights ……………….. Page 6-9

Meet The Owner - KC Kelly………….. Page 10

Trends & Risks ………………………. Page 11-12

Summary & Top 10: USP……………………Page 13 & 14

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TABLE OF CONTENTS

WWW.GadgetFix.COM

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INDUSTRY AT A GLANCE

WWW.GadgetFix.COM

$6 BILLION

2018 ANNUAL

REVENUES

GadgetFix® generates over $20,500,000 per year in revenue and has serviced over

500,000 customers in 16 years of business. Currently we have 25 locations.

There are 2 Locations in the Greater Tulsa, Oklahoma area, 5 Locations in Northern Arkansas, 3

Locations in Portland, Oregon and 2 Locations in Seattle, WA area 3 locations Tucson, AZ area, 10

Locations in Idaho areaLocations are strategically located in the best possible areas to maximize foot

traffic and profitability per customer.

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COMPANY AT A GLANCE

WWW.GadgetFix.COM

Who is GadgetFix®?

GadgetFix® seeks to “Become the Ultimate Destination for All Things Mobile.” Focusing on Apple, Samsung and other

Mobile devices offerings through Sales, Service & Protection. GadgetFix® locations function as retail outlets as well as

repair centers and have been the one stop solution for mobile and desktop customers. GadgetFix® over the last 16

years of business has established its self in 7 States as dominant regional players. GadgetFix® focuses on offering

quality repairs and exceptional customer service. The key differentiation between GadgetFix® and its competition is

that it innovates and executes on all it sets to do. This has allowed GadgetFix® to become one of the “Pioneers” of the

industry.

GadgetFix Core Value & Offerings:

Some of GadgetFix® Unique Value Propositions Include:

● Full LMS (Learning Management Software) that is turn key for initial and ongoing trainings of current or

future staff We call this “GadgetFix University or PDU”

● Unique Sales System and Scalable Training Systems.

● GadgetFix® is constantly innovating and is currently exploring new technology integrations to streamline

inventory ordering, control, and accuracy. This includes weighted shelving for easy inventory estimation.

GadgetFix® has completed north of 500,000 repairs in 16 years and has serviced over 50% of Tulsa’s

population! Currently they have over 20,000 customers in an automated marketing pipe and have regular

engagement on promotions.

GadgetFix® Model includes a Few Major Elements:

1. Sales - Used Pre-Owned handset offerings at retail.

2. Service - Same day repair of over 1000+ problems

3. Protection - Accessory and Warranty programs

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INVESTMENT HIGHLIGHTS

WWW.GadgetFix.COM

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INVESTMENT HIGHLIGHTS - CONTINUED

WWW.GadgetFix.COM

We believe in -

· Trusting One Another.

· Doing The Next Right Thing.

· Do, Delegate, or Delete.

· Wisdom Before Honor.

· Always Plan the Work, Work the Plan, and Trust the Plan will work.

· Focus on our core KPI’s (Key Performance Indicators)

o L – Leads – How are people finding GadgetFix® is a business birthed by God,

exceptional Service, and a pure love for people. Our foundation is about caring for

people.? How do they keep doing this?

o I – Inventory – Is the company in stock and ready to rock? Is there overstock?

Liquidate!

o P – Processes – Company must be bulletproof or the enemy will win, fortify at all costs!

o S – Sales – Everyone likes to buy, no one wants to be sold. Be honorable, and close

deals that truly provide value to customers.

· Focus on providing real value to our team members and customers equally.

Mobile Device Market:

The mobile device market includes mobile phones, smart phones, notebooks, tablets, laptops, drones, wearables and

hearables (such as smart watches, smart headphones and ear buds, etc.), and an array of other devices.

World-wide mobile device annual sales are in the range of 2 billion phones, 400 million tablets/note- books and millions of

additional mobile devices. Samsung, Apple, Huawei, Lenovo, Sony, LG are the market leaders in device sales. There are

approximately 10 billion mobile devices in use or approximately 1.4 per capita, world-wide. World-wide, smart phone users

are currently estimated to be 4.7 billion. That number is projected to grow to 6.1 billion in the next 4 years.

In summary, there are 4 fundamental truths about the mobile device market that will positively impact the mobile device

repair and parts markets: (1) The addressable market is very large, (2) The number of devices is growing rapidly and that

growth will continue for decades as more of the world’s population gets high-speed internet access, (3) Products are getting

increasingly smaller and lighter, and (4) Peoples’ reliance on technology and need for quick, convenient hardware repairs

and software fixes will become increasingly important.

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INVESTMENT HIGHLIGHTS - CONTINUED

WWW.GadgetFix.COM

Wireless Retail Repair Market:

Wireless retail repair operations in the United States range from one location companies to semi-large franchise

operations. The market is made up of one to two store owner-operated retail locations that act as a local “wireless

mechanic” with the beginning of consolidation happening in the market. Two of the largest companies within the space;

CPR: Cell Phone Repair and UBREAKIFIX are beginning to convert and open locations at a quicker-than-normal rate.

Although the expansion in the market is growing, GadgetFix® maintains dominance in the areas it operates in.

Since GadgetFix® inception in 2004, the wireless repair market has quadrupled to an estimated six billion in retail

sales. Most retail operations focus on several avenues of business with screen repair being the major driver of

revenue. Wireless repair locations also drive revenue through selling accessories, pre-owned devices, and computer/

virus repair.

The Company estimates that there are over 10,000 retail locations with only 15-20% of the market mix being large

repair operations. Over the next two years, the Company estimates an immense amount of consolidation, with the

operationally excellent organizations prevailing in the marketplace. GadgetFix® with its 10 locations stands out as not

only one of the early pioneers but is among the largest corporately operated chains that are growing and thriving.

GadgetFix® Has A Proven Business Model:

GadgetFix® has been operating for over 16 years in the wireless repair retail space, it is among the oldest and largest

repair companies in the industry. Over its tenure, GadgetFix® has seen several companies (national and local) come in

and out of business within the markets they operate. In addition, based on market knowledge, the average GadgetFix®

retail location does 30-50% more revenue than its’ competitors (national or local).

GadgetFix® management team is made up of individuals that have been in the market for as long as the company has

been around. Their experience is unmatched when looking at other management teams within the space. Given the

success of the company, the management team is truly remarkable in what they have been able to accomplish. The

fact that the company went from sub $1mm in sales in 2005 to a run of $3MM alone in retail revenue in 2018, they are

unmatched in corporately owned repair organizations. The company has not only withstood industry consolidation,

increased competition from local and national players, supply-chain problems in 2015, but has grown throughout all of

the market challenges that they faced.

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INVESTMENT HIGHLIGHTS - CONTINUED

WWW.GadgetFix.COM

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MEET THE OWNER - KC KELLY

WWW.GadgetFix.COM

• KC has spent over 10 years seeking mentorship from some of the most influential

entrepreneurs in America and has grown to just over 500,000 followers on his social

platforms where he focuses on helping others daily.

• He has spent many hours gleaning personal advice from known investors such as

Rooster McConaughey from CNBC’s West Texas Investors Club, Mark Cuban &

Daymond John from Shark Tank and Marcus Lemonis who is better known as the

“Profit” on CNBC helping turn small businesses around.

• KC’s initial 15 minutes of fame came when he was featured on National Media Channel

CNBC where he presented his company before millions of viewers on the hit show,

“West Texas Investors Club.” Since the shows airing in Sept 2015 he has been

recognized as a thought leader and an industry mover and shaker.

• KC is currently among the founding team of the “Independent Repair Coalition” and is

a known as a “Pioneer” in the industry.

• Because of his tenure in the market he knows by name almost everyone from the

smallest shop in a town you’ve never heard of, to the biggest players in the space.

The following paragraphs summarize management’s view of the six major risks (competitive risk,

supply chain disruption risk, technological change risk, mobile device price decline risk , lease

liability risk, and catastrophic risk) confronting the Company and, more generally, the mobile device

repair markets. Management will be glad to provide a more detailed analysis in conjunction with a

prospective buyer’s due diligence.

RISK #1 - COMPETITION

As the mobile device repair market has grown, it has attracted more players. That said, with the exception of a handful of medium-

sized franchise chains, all of the companies are small, privately owned companies which are typically owned by young

entrepreneurs in their 20’s and 30’s.

In summary, the risk from existing competitors is moderate. The degree of market fragmentation is a testament to the lack of

dominant competitors in the industry. The competitive factors are price, the consistency of product quality, product knowledge,

technician ability, warranty,

and customer service. Most of GadgetFix® direct competitors are at a disadvantage within the markets they co-habitate.

GadgetFix® has had over whelming success pushing out local and national players within the markets we occupy.

RISK #2 - SUPPLY CHAIN DISRUPTION

Essentially all of the parts purchased by the Company are sourced from Shenzhen, China. It is a possibility that there could be

some disruption in our ability to source parts from China due to geopolitical events. There is also the potential for foreign currency

fluctuations that could negatively impact the affordability of parts manufactured in China and therefore the entire mobile device

repair industry. While there are some steps the Company can take to manage these risks, they are largely beyond our control.

Additionally, the parts manufacturing and wholesale supply business in China is opaque and rife with inaccurate or incomplete

information. Prices fluctuate sometimes without explanation. In late 2015, prices for iPhone 5, 5S, 6 and 6S displays increased

dramatically. Upon investigation, we learned that Apple’s OEM LCD manufacturers had historically sold their production overruns

into the secondary market, where they were aggregated and eventually sold to repair companies in the US and elsewhere. Although

Apple had long been aware of this practice, it took aggressive steps to stop this “leakage” in 2015 by requiring its subcontractors to

destroy overruns rather than resell them. While there was a temporary shortage in Apple aftermarket parts, secondary

manufacturers of LCD units have responded to the increased demand and prices have normalized. Longer-term, management needs

to continue to enhance our understanding of the Chinese wholesale parts market and develop an international distribution capability

to support the Company’s growth in domestic markets.

RISK #3 - TECHNOLOGICAL AND PRODUCT CHANGES

There are any number of technological enhancements that have been and will be made to mobile devices. Additionally, there are

many after-market products that are designed to protect mobile devices from physical damage including, but not limited to,

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TRENDS & RISKS

protective cases, protective glass, and waterproofing substances. In fact, these products have been actively marketed to consumers

and commercial customers for years. That said, there is always the potential that some manufacturer will develop the

“indestructible” phone, notebook and/or PC. For many reasons, we believe that is highly unlikely, but there will undoubtedly be

changes in the design and complexity of mobile devices as the market evolves and to be successful, the Company will need to

continue to adapt to the ever changing needs of the marketplace.

RISK #4 - DECLINING PRICES FOR MOBILE DEVICES

When consumers damage their mobile devices, they need to consider the cost of replacing the device and the cost of repairing the

device. (They also need to consider other important factors such as recovering data stored on the device.) By way of example, if a

consumer could get a brand new replacement device for $120 and cost of repairing to the existing, damaged device was $110,

many consumers would just purchase a new, replacement device. However, if the cost of the new, replacement device was $500 or

more and the repair was less than $100, most consumers will opt for the repair. As a result, the viability of the repair market is in

part dependent upon the price-points for new mobile devices. This is why we have been diversifying our offering to focus

holistically on the device ecosystem.

That said - Apple and Samsung, the market leaders in smart phone sales, are heavily reliant on revenues from mobile device sales.

For 4Q – 2017 and 1Q – 2018, iPhone sales and IPad sales comprised 66% and 9%, respectively, of Apple’s total revenues. Mobile

phone sales comprise approximately 40% of Samsung’s total revenues.

Apple and Samsung are two of the world’s largest companies and presumably, they are going to do everything possible to sustain

the price points for these products. To do so, they will need to continue to innovate advancements in their products and maintain

strong brand recognition in the global consumer market.

RISK #5 - LEASE LIABILITY RISK

All retail companies face the same potential risk in that of their lease liability. GadgetFix® faces the same potential risk with its 10

corporately owned locations. Luckily, through a strong lease negotiation model and longevity within the current locations, the lease

liability is relatively low compared to other corporate-owned retail companies. The Company, from inception, has focused on

flexible short-term leases that provide the opportunity to move locations if necessary and to reduce the liability overall. The

average lease length left over the entire company is less than three years with renewals being even shorter terms.

RISK #6 - CATASTROPHIC EVENTS

Like most businesses, the Company does have to manage the risk of a natural catastrophe disrupting the Company’s operations.

You On the IT front, the Company has implemented appropriate data back-up and disaster recovery processes. These processes are

well documented and will be available for review in conjunction with due diligence.

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TRENDS & RISKS - CONTINUED

WWW.GadgetFix.COM

What’s Next?

At this point you’ve now been updated with a lot of our history, traction so far, and should have

been provided separate historical records & future financial projections. Our goal has been to

provide a pretty honest assessment of the market we’ve fought to secure in the last 16 years of

operating, and show you the way to a bright future through GadgetFix® as your partner!

We are excited for the future and are thankful you’d take the time to review our company and

consider making it apart of your story.

Sincerely -

KC Kelly

Owner

Email: [email protected]

Phone: 801-979-0123

www.gadgetfix.repair

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WWW.GadgetFix.COM

SUMMARY & CONTACT INFORMATION

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ROCKET INC - Top 10: UNIQUE SELLING PROPOSITIONS

TOP 10 USP's: