Pender Growth Fund Inc. (the “Company”) today announced its financial and operational results for the three months ended March 31, 2023.

Financial Highlights (Unaudited)

• Net loss was $3,293,058 for the three months ended March 31, 2023 (March 31, 2022 – Net loss $51,821,705) primarily the result of negative investment performance in the quarter.
• Net loss per Share for the three months ended March 31, 2023 was $0.44 (March 31, 2022 – Net loss $6.81).
• Shareholders’ equity per Class C common share (“Share”) was $8.85 as at March 31, 2023 (December 31, 2022 – $9.28).
• The Company’s total shareholders’ equity was $66.8 million as at March 31, 2023, a decrease from December 31, 2022 ($70.2 million) resulting primarily from negative investment performance during the period.
• Shares outstanding were 7,553,629 as at March 31, 2023, a decrease from December 31, 2022 (7,569,929) as a result of share repurchases under the Company’s Normal Course Issuer Bid (“NCIB”), which was renewed on February 14, 2023.
• At March 31, 2023, 84.6% of the investment portfolio was made up of private companies and 15.4% of public companies. However, taken together with the Company’s indirect exposure to public companies through its investment in Pender Private Investments Inc. (“PPI”) and Pender Technology Inflection Fund II Limited Partnership (“PTIF II”) , public companies make up 74.1% of the Company’s holdings.
• Management Expense Ratio (“MER”) excluding performance fees was 2.44% for the quarter ended March 31, 2023, up 0.49% compared to 1.95% in the first quarter of 2022.

RENDEMENT

The Company’s portfolio is materially concentrated in the shares of one publicly listed Portfolio Company, Copperleaf Technologies Inc. (“Copperleaf”). At March 31, 2023, considering both its direct investment and its indirect investment through its holding of shares of PPI, the Company held 6,762,065 shares of Copperleaf with a value of $­­­37.2 million, which was 55.7% of the Company’s total shareholders’ equity of $66.8 million (December 31, 2022 – 6,762,065 Shares with a value of $38.8 million which was 55.3% of the Company’s total shareholders’ equity of $70.2 million).

As at March 31, 2023, Copperleaf’s trading price was at $5.50 per share, down $0.24 per share from its December 31, 2022 closing price of $5.74 per share.  This decrease resulted in the unrealized loss that was one of main factors in the decrease of the Company’s total shareholders’ equity to $66.8 million ($8.85 per share) at March 31, 2023. There can be no assurance that the Company will be able to realize the value of this investment.

Faits saillants du portefeuille
The first quarter of 2023 saw a continuation of the market challenges that started in early 2022. Geopolitical uncertainty, elevated inflation and rising interest rates have all contributed to a slower economic growth outlook as we entered the year. With the peak in inflation likely behind us and central banks slowing and in some cases pausing their interest rate raising campaigns, the focus has turned to growth and the lag effect of tighter financial conditions. We believe that the Company continues to be well-positioned today to pursue its investment objectives despite current market volatility and valuations in micro and small cap stocks in North America.

The economic uncertainties around persistent inflation pressure, bank failures, geopolitical events and the lingering COVID-19 pandemic continue to impact the global economy.  While macro events have driven investor sentiment, we have remained focused on our bottom-up fundamental research to identify companies that can thrive in a wide range of economic scenarios.  We believe that this environment provides compelling opportunities for long term focused investors and that the Company is well-positioned to continue to pursue its investment objectives.

As always, this quarter we worked closely with our private portfolio companies and certain of our public portfolio companies.

Importantes participations au capital et événements récents
Pender Private Investments Inc.
At March 31, 2023, the Company held approximately 98% of the Legacy Shares of PPI, formerly the Working Opportunity Fund (EVCC) Ltd. (“WOF”). These shares were acquired in May 2021 from shareholders of WOF (“Exiting Shareholders”) under the previously announced transaction (the “WOF” Transaction) and in transactions subsequent to May 2021.

On May 23, 2023, PTF and PPI signed a non-binding letter of intent for PTF to purchase all of PPI’s Legacy Shares that are held by the 2% minority shareholders (the “Minority Shareholders”). It is proposed that PTF acquires the shares held by the Minority Shareholders under a plan of arrangement, at a price equal to 100% of the NAV in effect five business days before the execution of the definitive agreement (the “Purchase Price”). The Purchase Price will be recalculated five business days prior to the closing of the proposed transaction and will be adjusted up or down to a maximum of five percent based on the updated calculation. Completion of the proposed transaction remains subject to, among other things, the negotiation of a definitive agreement, approval of the PPI shareholders (including majority of the minority approval), receipt of a satisfactory Fairness Opinion and court approval. The proposed transaction is anticipated to close in Q3 of 2023.

Copperleaf Technologies Inc.
At March 31, 2023, the Company held 9.5% of Copperleaf’s issued and outstanding shares, both directly and through its investment in PPI.  The value of the Company’s direct and indirect holdings of Copperleaf was $37.2 million at March 31, 2023, which was 55.7% of the Company’s total shareholders’ equity.

Autres faits saillants
Nous avons continué à acquérir des parts de la société sur le marché dans le cadre de notre OPRA, car nous estimons que les actions se négocient actuellement à un prix inférieur à leur valeur intrinsèque. Le 14 février 2023, la société a lancé une nouvelle OPRA nous donnant droit d’acheter, au cours de la période d’un an se terminant le 13 février 2024, un maximum de 663 045 actions, soit 10 % de notre capital flottant à la date de lancement. 

We encourage you to refer to the Company’s MD&A and quarterly unaudited financial statements for March 31, 2023, the annual audited financial statements for the year-ended December 31, 2022, and other disclosures available under the Company’s profile at www.sedar.com .

À propos de la société
Pender Growth Fund Inc. est une société d’investissement. Son objectif consiste à réaliser une croissance du capital à long terme. La société se sert de son modeste capital de base et de sa vision à long terme pour investir dans des situations uniques, principalement des entreprises à petite capitalisation, des situations spéciales et des entreprises publiques et privées non liquides. La société investit dans des entreprises publiques et privées, principalement situées au Canada et aux États-Unis et issues, dans une large mesure, du secteur de la technologie. Elle se négocie sur la Bourse de croissance TSX sous le symbole « PTF » et affiche la valeur de son actif net sur son site Web, généralement dans les cinq jours suivant la fin de chaque mois.

Veuillez visiter www.pendergrowthfund.com.

Pour plus de renseignements, veuillez communiquer avec :

Tony Rautava
Secrétaire général
Pender Growth Fund Inc.
(604) 653-9625
Sans frais : (866) 377-4743

Ni la Bourse de croissance TSX ni son fournisseur de services de réglementation (tel que ce terme est défini dans les politiques de la Bourse de croissance TSX) n’acceptent de responsabilité quant à la pertinence ou à l’exactitude du présent communiqué de presse.

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