Mr. Tony Rautava reports

PENDER GROWTH FUND PROVIDES FINANCIAL HIGHLIGHTS AND COMPANY UPDATES

Pender Growth Fund Inc. today released its financial and operational results for the year ended Dec. 31, 2024.

Financial highlights

• Net income was $55,473,592 for the year ended Dec. 31, 2024 (Dec. 31. 2023 -- net income $1,029,528) due to positive investment performance during the year.
• Net income per Class C common share for the year ended Dec. 31, 2024, was $7.61 (Dec. 31. 2023 -- net income per share 14 cents).
• The company's total shareholders' equity increased by $53,195,329, from $69,886,178 at Dec. 31, 2023, to $123,081,057 as at Dec. 31, 2024, due to net income from positive investment performance of $55,473,592 during the year, offset by shares repurchase of $2,278,263 under the company's normal course issuer bid (NCIB).
  • Shareholders' equity was $17.25 per share as at Dec. 31, 2024 (Dec. 31, 2023 -- $9.48).
  • A total of 7,133,229 shares were outstanding as at Dec. 31, 2024 (Dec. 31, 2023 -- 7,368,229), a decrease of 235,000 shares as a result of shares repurchase under the NCIB, which was renewed on Feb. 15, 2024.
  • At Dec. 31, 2024, 64.7 per cent of the investment portfolio was made up of public companies and 35.3 per cent of private companies and net assets were 56.9 per cent publicly listed companies, 31.1 per cent private unlisted companies, and 12.0 per cent cash and other assets net of liabilities.
  • Management expense ratio (MER) before performance fees was 2.65 per cent for the year ended Dec. 31, 2024, up 0.34 per cent compared with 2.31 per cent in 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.

In October, 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. In early 2025, Acorn was merged into PSH and the shares of PSH formerly held by the Acorn were transferred to its principals. 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. The company believes this new enterprise has great potential.

With the significant run up in equities over the last year that has pushed large cap equity valuations to multiyear highs, the company remains vigilant and prepared for increased volatility as it enters 2025. The general trend in inflation continues to moderate toward central bank target levels and expectations are for continued interest rates cuts, albeit at a more moderate pace. Potential headwinds could also include trade policies, particularly tariffs, which could weigh on corporate earnings, and fiscal challenges in developed economies as government deficit spending remains high. There is always the potential for volatility as market expectations shift after such a strong run in risk assets in the past few quarters.

Pender believes that the company 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 broad economic conditions, inflation, central bank measures, geopolitical risks, market risk, unexpected judicial or regulatory proceedings, and other global events, 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. Pender 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.

In 2024, as always, the company worked closely with its private portfolio companies and certain of its public portfolio companies.

Other highlights

The company continued to acquire shares of the company in the market under its NCIB (normal course issuer bid) because the company believes the shares are trading at a discount to their intrinsic value. On Feb. 20, 2025, the company launched a new NCIB, under which the company may purchase a maximum of 587,342 shares, or 10 per cent of the company's public float on launch date, during the one-year period ending Feb. 19, 2026.

The company encourages you to refer to the company's MD&A (management's discussion and analysis) and the annual audited financial statements for the year ended Dec. 31, 2024, and other disclosures available under the company's profile at 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 NAV (net asset value) on its website, generally within five business days of each month-end.

We seek Safe Harbor.