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) -- 01/09/14 -- 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
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Cloud Expo, Inc. has announced today that Andi Mann returns to 'DevOps at Cloud Expo 2017' as Conference Chair The @DevOpsSummit at Cloud Expo will take place on June 6-8, 2017, at the Javits Center in New York City, NY. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great t...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2017 New York The 7th Internet of @ThingsExpo will take place on June 6-8, 2017, at the Javits Center in New York City, New York. Chris Matthieu is the co-founder and CTO of Octoblu, a revolutionary real-time IoT platform recently acquired by Citrix. Octoblu connects things, systems, people and clouds to a global mesh network allowing users to automate and control design flo...
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2017 New York. The 20th Cloud Expo and 7th @ThingsExpo will take place on June 6-8, 2017, at the Javits Center in New York City, NY. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Internet to enable us all to im...
Get deep visibility into the performance of your databases and expert advice for performance optimization and tuning. You can't get application performance without database performance. Give everyone on the team a comprehensive view of how every aspect of the system affects performance across SQL database operations, host server and OS, virtualization resources and storage I/O. Quickly find bottlenecks and troubleshoot complex problems.
"Dice has been around for the last 20 years. We have been helping tech professionals find new jobs and career opportunities," explained Manish Dixit, VP of Product and Engineering at Dice, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, discussed recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model for ...
Rapid innovation, changing business landscapes, and new IT demands force businesses to make changes quickly. In the eyes of many, containers are at the brink of becoming a pervasive technology in enterprise IT to accelerate application delivery. In this presentation, attendees learned about the: The transformation of IT to a DevOps, microservices, and container-based architecture What are containers and how DevOps practices can operate in a container-based environment A demonstration of how ...
"At ROHA we develop an app called Catcha. It was developed after we spent a year meeting with, talking to, interacting with senior citizens watching them use their smartphones and talking to them about how they use their smartphones so we could get to know their smartphone behavior," explained Dave Woods, Chief Innovation Officer at ROHA, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.