|By Marketwired .||
|January 13, 2014 08:16 PM EST||
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 01/14/14 -- Working Opportunity Fund (EVCC) Ltd. (the "Fund") provided updates today on the Commercialization Series and the Venture Series.
Commercialization Series' Update
The Fund announced today that the Board of Directors of the Fund has approved the payment of dividends on the 11 Series and 12 Series of the Commercialization Series in accordance with adopted dividend policies. The Fund has approved a dividend of $1.25 per share for each of the 11 Series and 12 Series of Class A Shares of the Commercialization Series. The dividend payments reflect the Fund's policy to pay dividends equal to 25% of the purchase price of the Commercialization shares within three years of the year of purchase. This policy has been met since the Fund began offering the Commercialization Series in 2005.
The Fund also reported today that the Fund decided to withdraw the preliminary simplified prospectus that was filed on November 7, 2013 with respect to the '14 Commercialization Series. On March 21, 2013, the Federal Government announced its decision to phase out the 15% federal Labour-Sponsored Venture Capital Corporation ("LSVCC") tax credit by 2017. The federal tax credit will be reduced to 10% in 2015 and 5% in 2016 before being eliminated in 2017. The phase-out of the federal LSVCC tax credit and the expectation of significantly reduced sales for the upcoming RSP sales season were the determining factors in the Board of Directors of the Fund in deciding not to pursue offering a new series of Commercialization Shares this RSP season.
Commenting on the decision, David Levi stated, "We have continued to assess the British Columbia market since the announcement in March regarding the federal tax credit and based on feedback from the investment community, we believe the landscape is too uncertain to proceed with an offering at this time."
The Fund and the Manager report that the Commercialization Series has a strong liquidity profile at this time and the decision to not pursue an offering this RSP season does not affect weekly redemptions of the Commercialization Series. The Commercialization Series Net Asset Value (NAV) is presently $37.9 million which is composed of $11.1 million of venture assets and $23.0 million in cash and other liquid assets. Debt investments represent 68.5% of the Commercialization Series venture investment portfolio. The top five venture holdings in the Commercialization Series total $7.6 million, or 20.1% of NAV. The Fund and the Manager believe that the Commercialization Series venture investment portfolio will generate sufficient income to satisfy future dividend payments in accordance with all adopted dividend policies on previously offered series. Dividends are not guaranteed and there can be no assurance that the portfolio will generate the cash flow needed to pay dividends in accordance with all adopted dividend policies. The value of most widely held Commercialization Series shares, 05 Series, increased 2.7% during the year ended December 31, 2013.
Venture Series' Update
WOF's Venture Series investments are primarily in BC based private companies. Typically, the most common exit mechanism is a merger & acquisition transaction ("M&A") of a portfolio company and a strategic buyer. Over the past three years, this is how M&A divestments occurred for each of Layer 7 Technologies Inc., Bycast Inc. and QuIC Financial Technologies Inc., among others. It is difficult to predict the timing of when an offer to acquire one of the Fund's portfolio companies will be successfully negotiated and closed with a potential strategic buyer.
The Fund believes the Venture Series is continuing a natural progression for a maturing venture capital portfolio. The Board of Directors of the Fund has commenced a full review of strategic options aimed at realizing on that potential value and providing liquidity for shareholders of Venture Series. These options are considered in light of a range of factors, including Venture Series' cash position, actual and projected levels of divestment activity, the prospects for generating exit values in excess of carrying values and the prospects for the Venture Series resuming weekly redemption processing. Weekly redemptions for the Venture Series remain closed until further notice and the Venture Series is not currently offered.
The Fund and its manager continue to work towards maximizing the return for all shareholders by maturing the companies in the Venture Series portfolio and positioning them for exit. As noted by Cindy Stewart, Chair of the Board of Directors of the Fund, "We are encouraged by the maturity of many of the companies in the Venture Series portfolio in terms of revenue, revenue growth, and having achieved profitability, and together with our manager, believe there are several companies well positioned for near to medium term exit."
The Ventures Series Net Asset Value (NAV) is presently $111.7 million which is composed of $102.6 million of venture assets and includes $4.6 million in cash and other liquid assets. As of December 31, 2013 the Fund has received approximately $15 million of unprocessed redemption requests which have been placed in a queue for processing in the order they are received in accordance with the Fund's articles. The value of most widely held Ventures Series shares, Balanced Shares (Series 2), increased 19.1% during the year ended December 31, 2013. The top holding of the Venture Series is Teradici Corp., currently valued at $27.5 million and comprising 24.6% of NAV. The top five holdings of the Venture Series are investments in Teradici Corp., D-Wave Systems Inc., BuildDirect.com Technologies Inc., ResponseTek Networks Corp. and Mixpo Portfolio Broadcasting Corp., totaling $70.2 million, or 62.9% of NAV.
Forward Looking Statements: This press release contains forward looking statements about the liquidity of the Venture Series and the Commercialization Series including future divestment activity, the value of the portfolios, resumption of the Venture Series share redemptions, future sales of Fund shares and the strategic review by the Fund's board. These statements are based on beliefs and assumptions of management of the Fund at the time the statements are made, including beliefs and assumptions about future market conditions, levels of sales, divestment activity, redemption requests and the strategic review by the Fund's board. These beliefs and assumptions are subject to known and unknown risks and uncertainties, including risks and uncertainties associated with volatility of market conditions and, in turn, the future climate for sales of the Fund's shares, divestment activity, redemption requests, and factors affecting sales of portfolio companies, other factors affecting the performance of portfolio companies, valuations of portfolio companies, financing needs of portfolio companies and the availability of capital to satisfy such financing needs and other risks and uncertainties disclosed in the Fund's most recent prospectus and other regulatory filings posted on SEDAR at www.sedar.com. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. Unless required by law, neither the Fund nor its manager assumes any obligation to update any forward-looking statements or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or other factors. All financial information contained in this press release is unaudited.
Commissions, trailing commissions, management fees and expenses all may be associated with investment fund purchases. Please read the Fund's prospectus before investing. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. Dividends on Commercialization Series shares are not guaranteed. The returns for Balanced Series 2 to December 31, 2013 are: one year: 16.4%; three years: 0.68%; five years: -0.93%; and since inception: -2.92%. The returns for Commercialization 05 Series to December 31, 2013 are: one year: 2.66%; three years: 3.65%; five years: 2.82%; and since inception: 4.71%. For questions related to submitting Venture Series redemption requests to the queue, please email [email protected] or call 1-800-268-8244.
Working Opportunity Fund (EVCC) Ltd.
President & CEO