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FTII NAV Decreases to $15.04 per share on September 30, 2008
The Fundamental Technologies II Net Asset Value per Share decreased to $15.04 on September 30, 2008.
It has certainly been a challenging quarter. Markets like these are particularly challenging for early stage technology companies by:
- Making it almost impossible to raise new financing, creating serious risks for every company that is not profitable
- Causing customers to cancel or delay orders
Mark to Mark Valuation - And Redemption Offer
Four of our five holdings are listed. Two are currently halted, but the other two don’t trade often. This makes our valuation subject to the same types of uncertainties as everyone else is facing today.
We believe a NAV of $15.04 is fair for our portfolio. To back up that statement, we are prepared to redeem any shareholder's entire investment at $15.04 for the next ten days at least.
68% in Cash
FTII is currently 68% in cash or GIC's. I wish it was higher. (But I hope it doesn’t become higher because the value of our current investments declines further.)
A Little Good News on Parasun for Next Quarter
After the close of last quarter, we received a final payment on the sale of our investment in Parasun. This was not, and is not, factored into our valuations. We did not think we would receive this payment and had accounted accordingly. Uniserve, another of our holdings, was in serious trouble. A few days ago, they completed the sale of Parasun to a US competitor. This final payment represents about $0.36 per FTII share.
Uncertainty Ahead
But with the current state of the markets, this unexpected gain on Parasun could easily be offset by our public investments before the end of this quarter and our next NAV calculation. Of specific concern are Uniserve and Shelby, which are halted.
Investment Strategy
In many ways, this is certainly the worst of times. But this market turmoil will also create opportunities – especially for anyone with cash. The biggest challenge will be timing.
Looking for Opportunities
We are looking for investment opportunities in two areas:
- Public companies with solid fundamentals and irresistibly low share prices, and
- Profitable private companies with even more attractive valuations
If you know of any investment opportunities that match these, and our other investment criteria, please send me an email.
Good luck in these challenging times,
Dr. Basil Peters
CEO and Director