Welcome!

News Feed Item

GrowthWorks Commercialization Fund Reports on Ontario Ministry of Finance Final Audit Findings, Suspension of Share Redemptions and Closing of Share Offering

TORONTO, ONTARIO -- (Marketwired) -- 01/10/14 -- GrowthWorks Commercialization Fund Ltd. (the "Fund") today provided an update on a previously disclosed audit by the Ontario Ministry of Finance (the "Ministry"). The Fund also announced its decision to suspend Class A share redemptions and to close the Fund's 14 Series Share offering.

Ontario Ministry of Finance Audit Findings

On November 29, 2013, the Fund announced that it had recorded a liability for the Fund's 05 Series of Class A Shares based on further developments related to preliminary audit findings from the Ministry's review of the Fund's compliance with certain investment requirements under the Community Small Business Investment Funds Act (Ontario) (the "Ontario Act") for the years 2005 through 2008. The Fund announced today that it has now received the final audit findings of the Ministry for these years and that the Ministry has not revised its preliminary findings. Those findings require a payment by the Fund of $230,493.15 for investment pacing taxes owing, a research business investment penalty of $1,794,068.57 and interest owing on those amounts of $1,070,323.38. The Ontario Act provides for a notice of objection process whereby the Fund may object to the Ministry's findings. The manager of the Fund (the "Manager") disagrees with the audit findings and intends to initiate, on behalf of the Fund, notice of objection proceedings under the Ontario Act with respect to the findings.

Based on the Manager's assessment of the preliminary audit findings, the Fund recognized a $1.32 million liability for taxes and penalties that may be imposed as a result of the Ministry's audit findings. The recorded balance includes $178,858 of accrued interest. The liability was allocated to the 05 Series of Class A Shares because the 05 Series represents a consolidation of the Series that were issued and participating in the Fund's venture portfolio during the period under review. The liability does not affect the net asset value per share of other Series, namely the 10 Series, 11 Series, 12 Series, 13 Series, or 14 Series.

The determination to recognize a $1.32 million liability was made following an assessment of written feedback received from the Ministry. The liability was recognized in the Fund's financial statements effective as at August 31, 2013 because such determination was made before completion of the preparation of the Fund's year end financial statements. For purposes of determining net asset value for share transactions, the liability was recognized effective as at November 29, 2013. Nothing provided in the Ministry's final audit findings has resulted in the Fund amending its recorded balance to date, although additional liabilities may be recognized in the future during or following the conclusion of the notice of objection or related appeal proceedings. There can be no assurance as to the outcome of the notice of objection or any related appeal proceedings or as to the quantum of any increase or decrease in the liability in respect of taxes or penalties resulting from the Ministry's audit findings. There can be no assurance that the Ministry will not review subsequent fiscal years or that any such review will not result in additional liabilities for penalties and interest that would be allocated to Series 10, Series 11, Series 12 or Series 13 Class A Shares of the Fund.

Suspension of Class A Share Redemptions

The obligation to pay the assessed Ontario taxes and penalties arises immediately, regardless of the Fund's disagreement with the assessed amount or any appeal undertaken by the Fund. Under applicable laws, the Fund can process Class A Share redemption requests only if after doing so the Fund would remain in a position to pay its liabilities as they become due. As a result of the Fund's obligation to pay those assessed amounts, the Board of Directors of the Fund cannot conclude that the Fund would meet this statutory test if the Fund were to process anticipated redemption requests as received. Accordingly, the Fund will not process redemption requests that are submitted until such time as the Board of Directors determines that the Fund would meet this test. There can be no assurance as to when, or if, the Fund will have sufficient cash available to process Class A Share redemptions.

The Fund will continue, as required under applicable securities laws, to allow shareholders to request redemptions of their Class A Shares. However, the Fund cannot process Class A Share redemption requests at this time and therefore redemption requests cannot be submitted electronically through FundServ. The following procedures are those established by the Fund for the submission and processing of Class A Share redemption requests. Further terms and conditions may be determined by the Board of Directors of the Fund from time to time.

--  Redemption Requests must be submitted manually using a Redemption
    Request Form approved by the Board of Directors of the Fund, which will
    be available on January 16, 2014 at www.growthworks.ca or on request by
    emailing [email protected] and by calling 1-800-268-8244. 
--  The Fund will not accept Redemption Request Forms that are incomplete or
    incorrect and will not accept alternative forms of redemption requests
    not approved by the Board of Directors.

The Fund will not process redemption requests that are submitted until such time as the Board of Directors of the Fund determines that the Fund meets the legal requirements for doing so. There can be no assurance as to when, or if, the Fund will have sufficient cash available to process Class A Share redemptions.

The Fund's assets consist primarily of venture investments in small to medium sized private Canadian corporations that are early stage research-orientated companies. The Fund's ability to generate cash is entirely dependent on levels of divestment activity in the venture portfolio, activity that is highly sensitive to market conditions. The Fund continues to actively pursue divestments of portfolio assets which are determined to be in the best interests of the Fund, as well as make selected follow-on investments. There can be no assurance as to the timing or value of these divestments.

The Board of Directors of the Fund continues to review strategic options aimed at realizing the value potential that is believed to exist in the Fund's venture investment portfolio and at providing liquidity for shareholders of the Fund. These options are considered in light of a range of factors, including the Fund's cash position, actual and projected levels of divestment activity, any decision to pay dividends to shareholders, further investments in existing portfolio companies, other operating commitments and the prospects for generating divestment values in excess of carrying values.

14 Series Off Sale

The Fund's Class A share offering for the 14 Series has been closed to new purchases, which follows from the one-year lapse date of the Fund's prospectus dated January 7, 2013. As a result, the Fund is offering no shares to the public at this time and does not expect to make such an offering in the immediate future.

Forward Looking Statements: This press release contains forward looking statements about (i) the outcome of notice of objection and any related appeal proceedings with respect to Ministry's final audit findings, (ii) the quantum of any adjustments that may be made in respect of taxes and penalties resulting from the Ministry's audit findings following the conclusion of such proceedings, (iii) the closing of the Fund's Class A Share redemptions and future redemption periods, (iv) the Fund's liquidity, including about the Fund's ability to make dividend payments, make venture investments and process Class A Share redemption requests, and (v) the Fund's decision to not offer Class A Shares to the public. These statements are based on beliefs and assumptions of management of the Fund at the time the statements are made, including beliefs and assumptions about arguments supporting the Fund's position with respect to the Ministry's audit findings, divestment market conditions generally and within the sectors in which the Fund's portfolio companies operate, timing and levels of Class A Share redemption requests, potential dividends payable to shareholders, investment activity and expectations for divesting from investments in the Fund's venture portfolio, the Fund's ability to generate sufficient cash to process Class A Share redemption requests, and the general market conditions for share offerings of retail venture capital funds. These beliefs and assumptions are subject to known and unknown risks and uncertainties, including risks and uncertainties associated with interpreting legislation that has not been litigated, the application of legislative discretion by the Minister of the Finance for Ontario, and uncertainty surrounding the outcome of administrative and potential court proceedings regarding the Ministry's audit findings, economic and market conditions, including divestment market conditions, investment activity and divestment activity, the timing and levels of Class A Share redemption requests, and the Fund's ability to generate sufficient cash to satisfy those redemption requests. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. Unless required by law, neither the Fund nor its Manager assumes any obligation to update any forward-looking statements or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or other factors. Dividends are not guaranteed.

Contacts:
GrowthWorks Commercialization Fund Ltd.
David Levi
Chief Executive Officer
(416) 934-7700
www.growthworks.ca

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
As many know, the first generation of Cloud Management Platform (CMP) solutions were designed for managing virtual infrastructure (IaaS) and traditional applications. But that's no longer enough to satisfy evolving and complex business requirements. In his session at 21st Cloud Expo, Scott Davis, Embotics CTO, explored how next-generation CMPs ensure organizations can manage cloud-native and microservice-based application architectures, while also facilitating agile DevOps methodology. He expla...
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone in...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices t...
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"I focus on what we are calling CAST Highlight, which is our SaaS application portfolio analysis tool. It is an extremely lightweight tool that can integrate with pretty much any build process right now," explained Andrew Siegmund, Application Migration Specialist for CAST, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
DevOps promotes continuous improvement through a culture of collaboration. But in real terms, how do you: Integrate activities across diverse teams and services? Make objective decisions with system-wide visibility? Use feedback loops to enable learning and improvement? With technology insights and real-world examples, in his general session at @DevOpsSummit, at 21st Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, explored how leading organizations use data-driven DevOps to clos...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
The dynamic nature of the cloud means that change is a constant when it comes to modern cloud-based infrastructure. Delivering modern applications to end users, therefore, is a constantly shifting challenge. Delivery automation helps IT Ops teams ensure that apps are providing an optimal end user experience over hybrid-cloud and multi-cloud environments, no matter what the current state of the infrastructure is. To employ a delivery automation strategy that reflects your business rules, making r...
The past few years have brought a sea change in the way applications are architected, developed, and consumed—increasing both the complexity of testing and the business impact of software failures. How can software testing professionals keep pace with modern application delivery, given the trends that impact both architectures (cloud, microservices, and APIs) and processes (DevOps, agile, and continuous delivery)? This is where continuous testing comes in. D
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...
Digital transformation is about embracing digital technologies into a company's culture to better connect with its customers, automate processes, create better tools, enter new markets, etc. Such a transformation requires continuous orchestration across teams and an environment based on open collaboration and daily experiments. In his session at 21st Cloud Expo, Alex Casalboni, Technical (Cloud) Evangelist at Cloud Academy, explored and discussed the most urgent unsolved challenges to achieve f...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application p...