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 nine months ended Sept. 30, 2024.

Financial highlights (unaudited):

• Net income was $5,815,990 for the three months ended Sept. 30, 2024 (Sept. 30, 2023 -- net loss of $97,003) due to positive investment performance in the quarter.
• Net income per Class C common share was 80 cents for the three months ended Sept. 30, 2024 (Sept. 30, 2023 -- net loss per share of one cent).
• The company's total shareholders' equity increased by $39,630,185, from $69,886,178 at Dec. 31, 2023, to $109,516,363 as at Sept. 30, 2024, due to net income from positive investment performance of $40,612,249 during the nine months, offset by shares repurchase of $982,064 under the company's normal course issuer bid (NCIB):
  • Shareholders' equity was $15.10 per share as at Sept. 30, 2024 (Dec. 31, 2023 -- $9.48).
  • Seven million two hundred fifty thousand four hundred twenty-nine shares were outstanding as at Sept. 30, 2024 (Dec. 31, 2023 -- 7,368,229), a decrease of 117,800 shares as a result of shares repurchase under the NCIB, which was renewed on Feb. 15, 2024.
  • At Sept. 30, 2024, 75.1 per cent of the investment portfolio was made up of public companies and 24.9 per cent of private companies, and net assets were 38 per cent publicly listed companies, 12.5 per cent private unlisted companies, and 49.5 per cent cash and other assets net of liabilities.
  • Management expense ratio (MER) before performance fees was 2.39 per cent for the quarter ended Sept. 30, 2024, down 0.06 per cent compared with 2.45 per cent in the third quarter of 2023.

Portfolio highlights

The completion of the sale of Copperleaf in the third quarter of 2024 and the resulting injection of $70-million cash substantially changed the company's portfolio. At June 30, 2024, the company's net assets were 95.7 per cent publicly listed companies, 13.3 per cent private unlisted companies, and minus 9.0 per cent cash and other assets, net of liabilities. At Sept. 30, 2024, Pender's net assets were 38 per cent publicly listed companies, 12.5 per cent private unlisted companies, and 49.5 per cent cash and other assets net of liabilities.

Since the Copperleaf closing, Pender has been deploying cash into opportunities that it believes show promise and, by Sept. 30, 2024, the portfolio included $58-million of cash. By Oct. 31, 2024, the cash balance was $35-million and, by Nov. 15, 2024, a further $8-million had been deployed into investments, and the company's net assets were 49 per cent publicly listed companies, 28 per cent private unlisted companies, and 23 per cent cash and other assets net of liabilities.

In October, subsequent to the quarter-end, the company closed the purchase of four private technology companies from Pluribus Technologies. The acquisition was made by Pender Software Holdings (PSH), a new entity owned 86 per cent by Pender, with the balance owned by Acorn Partners Inc. and its principals. Acorn is a Vancouver-based company that invests in tech companies and provides advisory services to clients. The four software companies acquired are each cash flow positive and stable. PSH is leaving existing management in place to facilitate a focus on operational excellence with strategic support and access to capital managed by Pender and Acorn. Ampere Chan, the founder and chief executive officer of Acorn, is the CEO of PSH. Pender intends to use PSH as a vehicle for investing in additional software companies. It believes this new enterprise has great potential.

Pender believes that it continues to be well positioned today to pursue its investment objectives, and the company continues to find attractive investments opportunities as valuations in microcap 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 broad economic conditions, inflation, central bank measures, geopolitical risks, market risk, unexpected judicial or regulatory proceedings, and geopolitical and other global events, factors that are beyond the company's control.

While macro events have driven investor sentiment, Pender 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 the company is well positioned to continue to pursue its investment objectives.

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

Other highlights

Pender continued to acquire shares of the company in the market under its NCIB because the company 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.

Pender encourages you to refer to the company's MD&A (management's discussion and analysis) and quarterly unaudited financial statements for Sept. 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 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 NAV on its website, generally within five business days of each month-end.

We seek Safe Harbor.