Working Opportunity Fund – June/July Update

Working Opportunity Fund (EVCC) Ltd. (“Fund”) continues to actively work with the management teams of portfolio companies to support them in optimizing their business to the ‘new normal’ in connection with the challenges and opportunities brought on by the COVID-19 pandemic. This includes reviewing and adjusting product development and roadmaps to either conserve cash, or alternatively, accelerate development to assist customers and pursue new opportunities that have recently developed.

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The Fund consists of two investment portfolios and two sets of shareholders, the Venture Series and the Commercialization Series, both of which are invested in private, BC-based technology companies.

Commercialization Series
On July 3, 2020 the Fund announced a $3.8 million dividend for shareholders of the Commercialization Series (fund codes WOF 104/105) which was paid on July 13. This was a dividend of $3.79 per share and represented over 60% of the current value of the Commercialization Series. Following payment of the $3.8 million dividend, net asset value is $2.4 million which is comprised of $1.4 million of private venture investments and approximately $1.0 million of working capital. We will also seek to distribute available cash from future divestments of portfolio companies by way of dividends.

The Fund, working with the Fund’s Board made a series of decisions. To maximize value and distribute liquidity from the portfolio by way of dividends, redemptions of the Commercialization Series were closed and the Fund has now ceased making payments of trailer commissions to dealers. The income earned on the cash held by the Commercialization Series was being offset by operating costs so payment of a $3.8 million dividend was determined to be appropriate. These changes for the Commercialization Series are all intended to set up the Fund to provide as much cash back to investors as possible.

Shares of WOF 104/105 were initially issued at $10.00, with shareholders receiving a $3.00 tax credit and $2.50 in dividends within the first three years. With the recent dividend of $3.79, shareholders will have received a total of $6.29 in dividends. Combining the dividends with the tax credit, shareholders have received over 90% of their original investment back, so far. Following payment of the dividend, the remaining value of Commercialization Series represented $2.36 per share.

Venture Series
Below is some recent news on one of the companies held by the Venture Series:

Copperleaf Technologies develops and sells software that is used by utility companies for asset investment planning and management (AIPM). The company uses real-time data and its extensive knowledge of asset management to help energy companies find the balance between maximizing profitability, while minimizing risk and cost

Copperleaf announced in June that Network Rail, the owner of Europe’s Fastest-Growing Railway, chose Copperleaf’s Decision Analytics solution. This represents a significant customer acquisition, secured based on the strong value proposition of its solution. Copperleaf’s customers are utility companies, which are typically some of the best prepared and most resilient organizations. The company’s value proposition continues to be strong as it helps this base of customers to optimize operations in response to the COVID-19 pandemic.

Copperleaf announced in July that it has been selected as a Patron of the Institute of Asset Management (IAM). Patrons are IAM members from leading asset management organizations across the world who help shape the direction of the IAM and the development of the asset management discipline. It is exciting to see Copperleaf being recognized as a thought leader in its industry with this significant endorsement by its peers.

Fund Overview
The Working Opportunity Fund consists of two investment portfolios, the Venture Series and the Commercialization Series, both of which are invested in private, BC-based technology companies. The Fund’s Venture Series and the Commercialization Series are closed for redemption and the Fund has a dividend distribution policy in place whereby available cash from the portfolio is distributed proportionately to all shareholders.

The Fund is reliant on exits from its private portfolio companies to generate liquidity for shareholders and as WOF’s investments in these companies are all minority equity positions, the timing and ability to effect realization of exits are largely beyond the control of the Fund. We believe that the long-term outlook for a number of the portfolio companies continues to be positive and there is potential for the Fund’s investments to provide value and meaningful liquidity to shareholders over time.

If you have more questions about your investment in WOF, please contact Prometa Fund Support Services by phone (888-787-9561), fax (888-747-0984) or email (workingopportunityfund@prometa.ca).