GrowthWorks Commercialization Fund Ltd. Provides Operations Update

TORONTO, July 25, 2018 /CNW/ - GrowthWorks Commercialization Fund Ltd. (the "Fund") today provided an update in relation to the ongoing efforts of the board of directors of the Fund (the "Board") to wind up the Fund.

Legal Proceedings

On March 7, 2018, the Ontario Court of Appeal dismissed an appeal of the August 2017 decision of the Ontario Superior Court of Justice (the "Superior Court") commenced by the Fund's former manager, GrowthWorks WV Management Ltd. (the "Former Manager"). In the decision, the Superior Court held that the Former Manager had illegitimately paid to itself $1.45 million from the Fund's bank accounts and ordered the Former Manager to repay approximately $1.46 million to the Fund (subject to a set-off of $11,600 for certain management fees) and to pay $35,000 in costs to the Fund. In addition to dismissing the Former Manager's appeal, the Ontario Court of Appeal ordered the Former Manager to pay to the Fund a further $20,000 in costs plus applicable interest. As a result of these litigation proceedings, the Fund has recovered approximately $1.5 million from the Former Manager. The time for a further appeal has expired, and therefore the decision of the Ontario Court of Appeal may no longer be appealed.

As previously announced, on January 22, 2018 the Fund obtained an order (the "Dissolution Order") of the Superior Court authorizing the orderly dissolution of the Fund pursuant to the Canada Business Corporations Act under the supervision of the Board. The Fund obtained the Dissolution Order in response to the Former Manager's efforts to impede the Board's efforts to wind up the Fund. The Former Manager has commenced an appeal of the Dissolution Order in what the Fund believes is a further effort to prevent the Fund from winding up. The outcome of such appeal cannot be predicted with any certainty. However, such appeal will cause the Fund to incur additional legal and other operating expenses, thereby reducing the likelihood of funds remaining available for distribution to the Fund's Class A shareholders on a winding up.

Tax Appeal

The Fund is continuing to pursue its appeal of the remaining 2014 audit findings of the Ontario Ministry of Finance ("MOF"), which resulted in a net payment by the Fund to the MOF of taxes, penalties and interest totalling approximately $1 million. The outcome of such appeal cannot be predicted with any certainty.

Winding-Up of the Fund

As at June 30, 2018, the Fund had cash and cash equivalents of approximately $896,000 and venture assets with an estimated value of approximately $620,000.

Notwithstanding the Former Manager's decision to pursue an appeal of the Dissolution Order, the Board intends to continue to pursue an orderly disposition of its remaining venture assets, with a view to satisfying any creditor claims, distributing its remaining property to its shareholders in accordance with their respective entitlements under the articles of the Fund, and winding up the Fund. Any such winding up and distribution is subject to the Fund obtaining all applicable court, regulatory, tax and third party approvals, rulings and clearances and to any delay and expense caused by the Former Manager's appeal of the Dissolution Order.

Portfolio Management

Following the termination of the management agreement with the Former Manager, the Fund entered into an investment advisor agreement (the "Investment Advisor Agreement") with Crimson Capital Inc. ("Crimson Capital"). Under the terms of the Investment Advisor Agreement, Crimson Capital provides advice and services to the Fund with respect to investments remaining in the Fund's investment portfolio. The term of the Investment Advisor Agreement expires on December 31, 2018.

Forward Looking Statements

This press release contains forward looking statements, including statements with respect to the proposed winding-up and dissolution of the Fund and legal proceedings involving the Fund. These forward-looking statements reflect the Fund's current views and are based on certain assumptions, including, but not limited to, assumptions as to future liquidity, capital resources, operating conditions, courses of action, general economic and market conditions and other factors the Fund believes are appropriate. Such forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in these statements, including, but not limited to, the risk that there may not be a market for the Fund's venture assets and the Fund may not be able to dispose of these assets on favourable terms, in a timely manner or at all; the risk that the proceeds that the Fund receives upon a disposition of its venture assets may vary materially and adversely from the historical values assigned by the Fund's former manager or the Fund's investment advisor; the risk that the Former Manager is successful in its appeal of the Dissolution Order, thereby delaying or preventing the winding-up of the Fund; the fact that such appeal, by causing the Fund to incur additional legal and other expenses, will reduce the total cash available to distribute to the Fund's shareholders on a winding up of the Fund; the risk that the Fund is not successful in its appeal of the MOF's remaining audit findings, either wholly or in part; the risk that dispositions of the Fund's venture assets will not yield proceeds which, when taken together with the Fund's net cash, will be sufficient to fund any cash distribution to the Fund's shareholders in connection with the proposed voluntary winding up and dissolution of the Fund, that such amounts will only be sufficient to fund payments to holders of certain classes of the Fund's outstanding shares, or that the amounts of such distributions will be less than those currently anticipated by the Fund; the risk that tax or other liabilities and, or, expenses incurred by the Fund, including but not limited to, expenses and other liabilities incurred to wind up the Fund, could materially reduce or eliminate the amount of cash available for distribution to all or some of the Fund's shareholders in connection with the proposed winding up of the Fund; and the risk that the Fund does not obtain the court, regulatory, tax or third party approvals, rulings and clearances required to complete the proposed winding-up of the Fund. 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. There can be no assurance that the proposed winding-up of the Fund or any other transaction will be completed. Unless required by law, the Fund does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or results or other factors.

SOURCE GrowthWorks Commercialization Fund Ltd.

C. Ian Ross, Chair of the Board of Directors, [phone]