Pender Growth Fund Provides Fi
VANCOUVER, British Columbia, Aug. 19, 2022 (GLOBE NEWSWIRE) — (TSXV: PTF) Pender Growth Fund Inc. (the “Company”) today announced its financial and operating results for the three and six months ended June 30, 2022.
Financial Highlights (unaudited)
- Net loss was $58,521,457 for the three months ended June 30, 2022 (June 30, 2021 – net income of $9,852,226) primarily due to negative investment performance during the quarter.
- Net loss per share for the three months ended June 30, 2022 was $7.71 (June 30, 2021 – Net earnings per share of $1.29).
- The shareholders’ equity per Class C common share (“Share”) was $11.58 as at June 30, 2022 ($26.08 as at December 31, 2021).
- The Company’s total equity was $87.8 million as of June 30, 2022, a decrease from December 31, 2021 ($198.6 million) resulting primarily from lower public equity prices during the quarter.
- The number of shares outstanding was 7,583,029 as of June 30, 2022, a decrease compared to December 31, 2021 (7,616,529) following share buybacks under the Public Tender Bid. normal course of business of the Company, which was renewed on February 14, 2022.
- As of June 30, 2022, 77.8% of the investment portfolio is made up of private companies and 22.2% of public companies. However, with the Company’s indirect exposure to public companies through its investment in Pender Private Investments Inc. (“PPI”) and Pender Private Debt Opportunities Fund I Limited Partnership (“PPDF”), public companies represent 86 .0% of the Company’s assets. .
- Management expense ratio (“MER”) excluding performance fees was 1.54% for the three months ended June 30, 2022, down from 4.50% compared to the same period of the prior period .
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The Company’s portfolio consists primarily of shares of a publicly traded holding company, Copperleaf Technologies Inc. (“Copperleaf”). As of June 30, 2022, the Company held 7,400,008 shares (7,521,693 shares as of December 31, 2021) of Copperleaf taking into account both its direct investment and its indirect investment through its ownership of PPI shares. As of June 30, 2022, Copperleaf’s closing price was $6.40 per share (December 31, 2021 – $23.85 per share), which reduced the Company’s unrealized gain on the stake compared to December 31, 2022. December 2021. The Company’s shareholders’ equity decreased by $14.50 per share in the first half of 2022, to $11.58 per share. During the six months ended June 30, 2022, the Company sold a total of 121,685 shares of its direct and indirect interests in Copperleaf. The value of the Company’s direct and indirect equity interests in Copperleaf was $47,360,051 as of June 30, 2022, or 53.9% of the Company’s total equity, down from 92.0% of total equity. of the Company as of December 31, 2021. There can be no assurance that the Company will be able to realize the value of this investment.
The conflict between Russia and Ukraine, the COVID-19 global health pandemic, and central banks’ decision to cut monetary and fiscal stimulus and raise interest rates to control inflation have raised concerns. concerns about the outlook for economic growth and created equity volatility as the uncertainty added by these developments were digested. We believe the Company continues to be well positioned today to pursue its investment objectives despite the current market volatility and valuations of micro and small cap stocks in North America.
As always, this quarter we worked closely with our private portfolio companies and some of our public portfolio companies.
Key Equity Investments and Recent Developments
Pender Private Investments Inc.
As of June 30, 2022, the Company owned approximately 98% of the shares inherited from PPI, formerly Working Opportunity Fund (EVCC) Ltd. (“WOF”). These shares were acquired in May 2021 from shareholders of WOF (“Leaving Shareholders”) in the previously announced transaction (the “WOF” Transaction) and in transactions subsequent to May 2021.
Copperleaf Technologies Inc.
As of June 30, 2022, the Company owned 10.6% of the issued and outstanding shares of Copperleaf, both directly and through its investment in PPI. The value of the Company’s direct and indirect equity interests in Copperleaf was $47,360,051 as of June 30, 2022, or 53.9% of the Company’s total equity.
D-Wave Systems Inc.
On August 8, 2022, D-Wave announced the completion of its previously announced intention to list on the New York Stock Exchange following a business combination with DPCM Capital, Inc. and D-Wave Systems Inc. ., as a publicly traded SPAC named D-Wave Quantum Inc., under the symbol QBTS. The Company holds shares of D-Wave both directly and indirectly, through Pender Private Investments Inc., and all of its shares are subject to a hold period.1. There is no guarantee that the value of the D-Wave shares will be realized after the expiry of the lock-up period.
We have continued to purchase shares of the Company in the market under our issuer bid because we believe the shares are trading at a discount to their intrinsic value. On February 14, 2022, the Company launched a new OPR, under which the Company may purchase a maximum of 678,839 shares, i.e. 10% of the Company’s free float on the launch date, during the period of one year ending February 13, 2023.
We encourage you to review the Company’s MD&A and unaudited quarterly financial statements as of June 30, 2022, the audited annual financial statements for the year ended December 31, 2021, and other information available under the Company’s profile. Company on www.sedar. com for more information.
1 The lock-up period is the lesser of (A) six months after the close and (B) the date on which the last declared sale price of the QBTS is equal to or greater than $12.00 per share for twenty trading days during of thirty consecutive trading days period beginning after the ninetieth day following the closing
About the company
Pender Growth Fund Inc is an investment company. Its investment objective is to achieve long-term capital growth. The Company uses its small capital base and long-term horizon to invest in unique situations, primarily small caps, special situations and illiquid public and private companies. The company invests in public and private companies based primarily in Canada and the United States, primarily in the technology sector. It trades on the TSX Venture Exchange under the symbol “PTF” and posts its net asset value on its website, usually within five business days of the end of each month.
Please visit www.pendergrowthfund.com.
For more information, please contact:
Pender Growth Fund Inc.
Toll Free: (866) 377-4743
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the Company’s business and the environment in which it operates. Forward-looking statements are identified by words such as “believe”, “anticipate”, “project”, “expect”, “intend”, “plan”, “will”, “may”, ” estimate” and other similar expressions. These statements are based on the Company’s expectations, estimates, forecasts and projections and include, but are not limited to, statements regarding the Company’s reduced portfolio risk and future investment opportunities. The forward-looking statements contained in this press release are based on certain assumptions; they are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, factors discussed under “Risk Factors” in the Company’s Annual Information Form. Company available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate, as actual results may differ materially from those expressed in such forward-looking statements. Accordingly, readers should not place undue reliance on these forward-looking statements. Further, these forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.