The fourth quarter of 2024 we took a huge step forward in the Alturas Business Fund. While we continued expanding and improving the Idaho Fitness Factory, we also added a second business in the fund. The Studio Academy of Beauty is the first of what we hope are multiple acquisitions in the vocational training space. The goal is to expand in each state where we operate through new course offerings and new locations. In Arizona, we are exploring the possibility of offering new programs in nails, massage, barbering and others.

On December 5th we officially closed on The Studio Academy of Beauty, a cosmetology school based in Phoenix, Arizona. With three locations (Phoenix, Chandler and Tolleson), 66 employees, a great leadership team, and hundreds of students, the business already has a great foundation for success and growth. This acquisition is our first in a larger strategy to find 1-3 location schools and expand their footprint around the country. While this is a new industry, we are diligently working to understand the unique elements of this business and ensure a smooth transition and continued operations.

At Idaho Fitness Factory, we made one of the most significant improvements to date as we standardized and increased our pricing in October. We increased prices for thousands of legacy members who were paying well below market rates. Although we anticipated a heavy turnover during this process, we lost very few members and increased our revenue potential significantly with every customer paying a new, higher price. We are delivering on the right value proposition for our customers, who were willing to pay more for their memberships.

We reconfigured gyms and replaced aging equipment with brand new equipment in preparation for the price increase. We will continue making additional improvements in our gyms in 2025 by completing the swap out of all remaining old equipment.

We opened the 10th location in November at our Victory and Eagle location in south Meridian, with nearly 1,000 presales and almost 2,000 members before the end of the year. We recently began our remodel of the former Walgreens owned by the Alturas Real Estate Fund at Chinden and Eagle and expect to open that location in June of 2025.

We are also on track to break ground on a new building in North Meridian that is slated to open in the fourth quarter of 2025. Finally, we are also working on a potential lease for a third 2025 opening.  Momentum is building and we continue to look at locations in the Boise area but are also exploring expansions opportunities in other cities around Idaho and beyond. 

With two operating businesses in the fund, we have the starting point of a diversified portfolio of cash flowing businesses that can independently scale into 100+ million-dollar businesses. We are learning a lot about what it takes to successfully source, underwrite, purchase and scale companies that fit our model. Our team is growing. We are seeing more and more opportunities and passing on almost all of them. We are confident that our principled approach will continue to pay off.

With our continued expansion of IFF and goal to acquire additional vocational schools, there is an opportunity this year for additional investment. Please fill out the investor form or reach out to Blake or Lucas if you are interested in making an investment.

Thank you for your continued support,