Working Opportunity Fund Announces Letter of Intent

VANCOUVER, British Columbia, Dec. 21, 2020 (GLOBE NEWSWIRE) — Working Opportunity Fund (EVCC) Ltd. (“WOF” or the “Fund”) is pleased to announce that it has entered into a non-binding Letter of Intent (“LOI”) with a third party for the acquisition (the “Transaction”) of all of the issued and outstanding shares of the Fund. Under the LOI, Venture Series shareholders would receive a cash payment at a discount to Net Asset Value (“NAV”) at close of the Transaction or they may instead elect to maintain their pro rata participating position in the Venture Series portfolio at full NAV at close of the Transaction. Other key terms for those Venture Series shareholders electing continued participation in the Venture Series legacy portfolio would include an accrued “all-in” management fee which is expected to result in lower overall operating costs than currently experienced. This fee would be accrued and paid only when a divestment from the legacy portfolio occurs with net divestment proceeds being distributed pro rata. Under the proposed Transaction, Commercialization Series shareholders would receive a cash payment at a discount to NAV.

As previously reported, over the past few years the Board of the Fund has undertaken a strategic review to evaluate ways in which to reduce costs and enhance liquidity options for shareholders. With the assistance of independent legal and financial advisors, a special committee of directors independent of the Fund’s current manager, reviewed and analyzed a number of options in seeking to meet those objectives. In addition to the paramount consideration of providing individual choice for Venture Series shareholders, other key factors considered by the Special Committee in reaching its recommendation that the Fund enter into the LOI included: an assessment of the other options available to the Fund at this time including the lack of significant distributions to Venture Series shareholders since adopting the cash dividend distribution policy in 2014 and taking into account actual and potential conflicts of interest; the ability of the shareholders to receive material liquidity by way of cash consideration eliminates the drawbacks of requiring individual shareholder action to access liquidity; and for those electing to continue to participate in the legacy Venture Series portfolio, a reduction in operating costs including through an accrual of fees to help address the ongoing working capital challenges for the Venture Series, and having divestment proceeds distributed pro rata eliminates the concern of “last investor standing” with a fixed investment portfolio.

Cindy Oliver, Chair of the Fund commented: “In accepting the unanimous recommendation of the Special Committee, the Board believes this proposed Transaction, if completed, would give our over 17,000 Venture Series shareholders the ability to make their own choice. We recognize we have two types of shareholders: those that want and need liquidity now and those that would like to continue to participate in the potential upside of the companies in the portfolio over time. While the cash consideration will be at a discount to NAV, this proposed Transaction would provide a material amount of liquidity. And for those shareholders who elect to continue to participate in the potential upside of the legacy portfolio, the new structure will facilitate the reduction of operating costs and easing of working capital pressures.”

The final structure of the Transaction will be determined by the parties following the receipt of tax, corporate and securities law advice. Pursuant to the terms of the LOI the parties will work towards finalizing and executing a definitive agreement for the Transaction in early 2021, with the Fund having agreed to a corresponding exclusivity period. Completion of the Transaction is subject to a number of customary conditions to closing, including regulatory and shareholder approvals and the Fund receiving comfort from a qualified person with respect to the financial fairness of the consideration being received by the Fund’s shareholders. A detailed information circular describing the Transaction will be mailed to shareholders prior to any meeting at which the Transaction is considered for approval.

About Working Opportunity Fund (EVCC) Ltd.

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. In 1989, the Province of British Columbia enacted the Employee Investment Act to encourage B.C. residents to invest indirectly in eligible small and medium-sized British Columbia businesses, encourage greater employee participation in share ownership and enterprise development, create and protect jobs and promote growth and diversification of the B.C. economy. The Fund’s labour sponsor formed the Fund in 1990 and joined the Province in a “working partnership” among government, labour and business. Since its first investment in 1993, WOF has been an active investor with over $600 million invested in over 130 BC-based technology companies. Thousands of high paying knowledge sector jobs have been created by these companies. An example of this is seen with five current portfolio companies (Copperleaf, Teradici, General Fusion, Cooledge, D-Wave), that with the backing of WOF have collectively grown from 50 employees to 742 employees today. This significant employment creation is an example of the significant contribution that WOF has brought to the province. The Fund has been recognized twice by the Canadian Venture Capital Association with a Deal of the Year Award. For more information, please visit http://www.penderfund.com/funds/working-opportunity-fund/.

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Forward Looking Statements

This news release contains forward looking statements which primarily relate to the ability to complete a transaction with a third party for the acquisition (the “Transaction”) of all the issued and outstanding shares of the Fund, including, for those shareholders who choose to continue to participate in the Venture Series legacy portfolio, statements about future cost savings. All forward looking statements are based on management’s current beliefs and assumptions on a range of factors related to these matters 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 ability to finalize terms of the Transaction as described or otherwise, the ability to meet operating commitments and future cost savings, negotiations with a third party, obtaining shareholder approvals, obtaining any required regulatory approvals, obtaining opinions from professional advisors, and the Board of Directors of the Fund reaching decisions based on that information and opinions. No assurance can be given as to the timing, the final terms, and the ability of the Fund to the completion of the Transaction for either for Venture Series and Commercialization Series shareholders. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Fund does not assume any obligation to update any forward-looking statements made in this release.