Mr. Tony Rautava reports

PENDER GROWTH FUND PROVIDES FINANCIAL HIGHLIGHTS AND COMPANY UPDATES

Pender Growth Fund Inc. has released its financial and operational results for the three months and six months ended June 30, 2024.

Financial highlights (unaudited)

• Net income was $22,533,335 for the three months ended June 30, 2024 (June 30, 2023: $41,217), due to positive investment performance in the quarter.
• Net income per Class C common share was $3.09 for the three months ended June 30, 2024 (June 30, 2023: one cent).
• The company's total shareholders' equity increased by $34,113,306 from $69,886,178 at Dec. 31, 2023, to $103,999,484 as at June 30, 2024, due to net income from positive investment performance of $34,796,261 during the quarter, offset by shares repurchase of $682,955 under the company's normal course issuer bid (NCIB).
• Shareholders' equity was $14.29 per share as at June 30, 2024 (Dec. 31, 2023: $9.48).
• Seven million two hundred seventy-eight thousand twenty-nine shares were outstanding as at June 30, 2024 (Dec. 31, 2023: 7,368,229), a decrease of 90,200 shares as a result of shares repurchased under the NCIB, which was renewed on Feb. 15, 2024.
• At June 30, 2024, 87.8 per cent of the investment portfolio was made up of public companies and 12.2 per cent of private companies.
• Management expense ratio (MER) before performance fees was 2.65 per cent for the quarter ended June 30, 2024, down 0.01 per cent compared with 2.66 per cent in the second quarter of 2023.

                                    PERFORMANCE 
                         (based on shareholders' equity)

                     Three month  One year   Three year   Five year   Since inception

Class C                    28.0%     61.4%        32.1%       29.4%             20.6%

The company's portfolio is materially concentrated in the shares of one publicly listed portfolio company, Copperleaf Technologies Inc. On June 11, 2024, Copperleaf Technologies entered into a definitive arrangement agreement with Industrial and Financial Systems, IFS AB (IFS), pursuant to which IFS has agreed to indirectly acquire all of the issued and outstanding common shares of Copperleaf for $12.00 in cash per share. As at June 30, 2024, the company held 6,739,883 shares of Copperleaf with a value of $79,867,614, which was 76.8 per cent of the company's total shareholders' equity of $103,999,484 (Dec. 31, 2023: 6,889,883 shares with a value of $41,614,893, which was 59.5 per cent of the company's total shareholders' equity).

Portfolio highlights

With the general trend in inflation continuing to moderate toward central bank target levels, expectations have shifted to interest rate cuts in the second half of the year. This trend has already become evident in Canada, with the Bank of Canada cutting interest rates twice in the second quarter with more expected to come. There is an elevated potential for volatility as market expectations shift and after such a strong run in risk assets that past few quarters. The company will continue to monitor these macro events, and assess their impact on the company and its portfolio companies. The company's goal remains to target businesses with durability and balance sheet strength to weather a variety of economic environments.

The company believes that it continues to be well positioned today to pursue its investment objectives, and it continues to find attractive investments opportunities as valuations in micro and small-cap stocks in North America remain attractive despite the recent rally this year.

Investment results may be affected by future developments and new information that may emerge about inflation and the impact of central bank measures on the economy, the state of merger and acquisition markets, geopolitical and other global events, and factors that are beyond the company's control.

While macro events have driven investor sentiment, the company has remained focused on its bottom-up fundamental research to identify companies that can thrive in a wide range of economic scenarios. It believes that this environment provides compelling opportunities for long-term-focused investors and that it is well positioned to continue to pursue its investment objectives.

As always, this quarter, the company worked closely with its private portfolio companies and certain of its public portfolio companies.

Significant equity investments and recent developments

Copperleaf Technologies

At June 30, 2024, the company held 8.6 per cent of Copperleaf's issued and outstanding shares. The value of the company's holdings of Copperleaf was $79.9-million at June 30, 2024, which was 76.8 per cent of the company's total shareholders' equity.

Other highlights

The company continued to acquire its shares in the market under its normal course issuer bid because it believes the shares are trading at a discount to their intrinsic value. On Feb. 15, 2024, the company launched a new NCIB, under which the company may purchase a maximum of 630,188 shares, or 10 per cent of the company's public float on launch date, during the one-year period ending Feb. 14, 2025.

The company appointed a new board member, Kristal Hamakawa, to its board of directors, effective upon the date of regulatory approval. Her extensive experience in finance and accounting with financial and governance institutions will undoubtedly contribute to the continued success and growth of the organization.

The company encourages you to refer to its management discussion and analysis, and quarterly unaudited financial statements for June 30, 2024, the annual audited financial statements for the year ended Dec. 31, 2023, and other disclosures available under the company's profile on SEDAR+ for additional information.

About Pender Growth Fund Inc.

Pender Growth Fund is an investment firm. Its investment objective is to achieve long-term capital growth. The company utilizes its small capital base and long-term horizon to invest in unique situations, primarily small cap, special situations, and illiquid public and private companies. The firm invests in public and private companies principally in the technology sector. It trades on the TSX Venture Exchange under the symbol PTF and posts its net asset value on its website, generally within five business days of each month-end.

We seek Safe Harbor.