News Release: Working Opportunity Fund Portfolio Update
Vancouver, B.C. February 28, 2020 – Working Opportunity Fund (EVCC) Ltd. (“WOF” or the “Fund”) provides a portfolio update.
One of the Fund’s private portfolio companies had accepted a term sheet in January 2020 for a significant equity financing. The portfolio company was not successful on closing that financing. If the portfolio company is successful in closing an alternate financing it is expected to be at significantly unfavourable terms to existing investors, including WOF. While an outcome such as this reflects the inherent risk in venture capital investing, this is a very disappointing situation for existing investors of this portfolio company.
The carrying value WOF’s investment in this portfolio company is reduced to reflect the expected economics of the alternate financing the portfolio company is now working to close. The impact to WOF is a reduction in carrying value of $10.8 million for Venture Series and $1.1 million for Commercialization Series. This represents a reduction in net asset value of approximately 14.6% and 12.1% respectively. There can be no assurance that the portfolio company will be able to close this alternate financing or any other financing.
The Fund’s Venture Series is closed for redemption and it 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 Venture Series 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. The Fund’s Commercialization Series is open for redemption.
About PenderFund Capital Management Ltd.
Pender was founded in 2003 and is an independent, employee-owned investment firm located in Vancouver, British Columbia. Our goal is to protect and grow wealth for our investors over time. We have a talented investment team of expert analysts, security selectors and independent thinkers who actively manage our suite of niche investment funds, exploiting inefficient parts of the investing universe to achieve our goal.
For more information on Pender, standard performance information for our funds and important disclosures, please visit www.penderfund.com.
For more information please contact:
Investment Associate, Private Equity
Director of Marketing
Forward Looking Statements. This press release contains forward looking statements which primarily relate to assessments of the private portfolio company affected by the financing, the financing needs of that company and portfolio companies generally, and the availability of capital to satisfy such financing needs, development and value of the portfolios, concentration of the investment portfolios liquidity position of the Venture Series, the targeted timing of, ability to complete, and amount of proceeds from, venture portfolio exits from the Venture Series venture investment portfolio, future dividends under the cash dividend distribution policy, the ability to make follow-on investments and meet operating commitments, future economic and market conditions, including M&A and IPO market conditions and to redemptions of Commercialization Series shares. All forward looking statements are based on management’s current beliefs and assumptions on a range of factors which are subject to numerous known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, the portfolio companies’ need for and access to further financing, concentration of the portfolio, M&A and IPO market conditions generally and within the sectors in which portfolio companies operate, market potential of technologies and products under development or offered by portfolio companies, the management, intellectual property rights, performance and stage of development of portfolio companies and, the ability of the Venture Series to complete an orderly realization of value of its venture portfolio, the ability of the Venture Series to meet other operating commitments, future cost savings, and the liquidity position of the Commercialization Series and its ability to process redemption requests and meet other operating commitments. Certain information contained in this press release is provided by/based on information from third party sources and while we believe it to be reliable, we cannot guarantee its accuracy or completeness. No assurance can be given as to the timing or amount of any future cash dividends to Venture Series shareholders or the ability to fund follow-on investments and/or ongoing operations. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Neither the Fund nor Pender assumes any obligation to update any forward-looking statements made in this release.