Fuse Medical, Inc.

Where It Passes

Where It Falls Short

• Growth0% pass✓ 2✗ 11▾

  No clean pass — all 8 investors flag at least one growth criterion

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 0.7x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR0.0%

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 8.7% vs Rev: -8.7%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$-0.03 (2011) -> $0.04 (2022)

  ✓DremanPositive over recent years

  EPS CAGR-29.7% CAGR over 6 years

  ✗Dreman> 5% annualized

  Positive Net Income Frequency5/12 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-6.6%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR0.0% CAGR over 5 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 59.4% -> 61.9%, operating margin -4.8% -> -4.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR-6.7%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR0.0% over 5 years

  ✗Neff7%-20% annualized
• Efficiency0% pass✗ 11▾

  All 8 investors flag FZMD's efficiency

  Current Ratio1.11

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-162.0%

  ✗Buffett> 10%

  ROIC - WACC-172.0%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-66.2%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.29 -> 1.11

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY1.12x -> 0.94x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.11

  ✗Dreman> 1.5

  Return on Invested Capital-38.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2020: ROIC=unavailable; FY2021: ROIC=unavailable; FY2022: ROIC=-38.2%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC-38.2% (RR=100% x ROIC=-38.2%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/3 years above 12% (latest -38.2%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts7% pass✓ 1✗ 13▾

  Split decision: 12 FAIL · 3 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (0/9)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)✗GreenblattRank #2522✓PiotroskiPASS (F-Score 5)✗DremanFAIL (3/11)✗MungerFAIL (1/4)•PabraiNEUTRAL (2/3)✗AkreFAIL (1/6)✗MarksFAIL (2/5)✗AckmanFAIL (2/9)✗TempletonFAIL (3/8)✗SleepFAIL (1/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (0/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage8% pass✓ 1✗ 14▾

  11 of 12 flag FZMD's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: N/A (negative equity), IC: -4.8x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / EquityN/A (negative equity)

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.11

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt LevelsN/A (non-positive equity)

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-4.8x, D/EBITDA=N/A

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section
• Valuation15% pass✓ 9✗ 19▾

  11 of 13 flag FZMD's valuation — Graham, Lynch, Greenblatt +8 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 0.7x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-20.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-20.0%, ROC=-66.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS0.7x

  ✓Dreman< 12x✓Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)63.7x

  ✗Dreman< 8x

  Price / Book Value per ShareN/A (negative BVPS)

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=0.7x, OE Yield=145.9%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=0.7x

  ✓PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=0.7x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low150% of trailing low ($0.02)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+139.75%; #82/6340 (top 1.3%)

  ✓AsnessTop 30% of eligible cross-section✓OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization-0.1402; #5762/6449 (top 89.3%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS0.7x

  ✓NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+8.4104; #357/5247 (top 6.8%)

  ✓OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+0.00%; #2690/6202 (top 43.4%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Profitability19% pass✓ 11✗ 24▾

  13 of 16 flag FZMD's profitability — Graham, Buffett, Lynch +10 more

  Positive EPS (10 years)4/14 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)5/14 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)1.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-4.4% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-1.3M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 0.7x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR0.0%

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROEN/A (negative equity)

  ✗Lynch> 15%

  EBIT / Enterprise Value-20.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-20.0%, ROC=-66.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets15.68%

  ✓PiotroskiROA > 0

  ROA Change YoY-8.67% -> 15.68% (delta: +24.35%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=0.18%, ROA=15.68%

  ✗PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY58.5% -> 61.9%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue16.7%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity

  ✗Dreman> 12%

  Margin of SafetyP/E=0.7x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity96.1% (3-yr avg)

  ✓AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency5/12 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-4.4%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity

  ✗Ackman>= 15%

  5-Year EPS CAGR0.0% CAGR over 5 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-4.8% (2020) -> -4.4% (2022)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 59.4% -> 61.9%, operating margin -4.8% -> -4.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+139.75%; #82/6340 (top 1.3%)

  ✓AsnessTop 30% of eligible cross-section✓OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+58.40%; #494/3702 (top 13.3%)

  ✓AsnessTop 30% of eligible cross-section

  Net income / positive book equity

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.1437; #3901/5884 (top 66.3%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR0.0% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years4/10 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Cash Flow30% pass✓ 4✗ 8▾

  7 of 10 flag FZMD's cash flow — Buffett, Piotroski, Dreman +4 more

  Free Cash Flow Proxy$-1.3M

  ✗BuffettPositive and growing

  FCF Positive and Growing$0.2M

  ✓LynchPositive and growing

  Operating Cash Flow$0.0M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=0.18%, ROA=15.68%

  ✗PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)63.7x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=0.7x

  ✓PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive4/7 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency6/12 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models50% pass✓ 1✗ 1▾

  Models split on FZMD at $0.03 — fair values range $0.03–$0.25

  Pabrai fair value$0.25

  ✓Pabrai+88.0% margin vs $0.03

  Marks fair value$0.03

  ✗Marks0.0% margin vs $0.03