BC Advantage Funds (VCC) Ltd.

BC Advantage Funds (VCC) Ltd.

September 20, 2011 15:51 ET

BC Advantage Funds Secures Financing for Additional Investments Into Portfolio Companies

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 20, 2011) - BC Advantage Funds (VCC) Ltd. announced today that it has entered into a $4,000,000 loan agreement with BCC Lending Services Ltd., an affiliate of Beedie Capital Partners. Proceeds of the loan will be used to make follow-on investments in Advantage's portfolio companies and for general working capital purposes.

Frank Holler, Chairman & CEO of Advantage, said, "This loan provides us with capital to make follow-on investments in our most promising portfolio companies. Being able to make these investments protects us from suffering the material dilution which can result from not participating in follow-on financings. Further, by providing additional capital to our portfolio companies we are able to help fuel their growth and further advance their liquidity options."

Beedie Capital will receive a base level of interest on the loan, payable monthly, as well as additional interest payments and bonus payments, payable from a portion of the proceeds Advantage receives on income and sales of its portfolio investments. The loan has a term of 36 months and principal payments are not required during the term of loan except on income and sales of portfolio investments.

As part of the loan agreement, Lions Capital Corp., fund manager for Advantage, has agreed to terminate its management agreement with Advantage and transfer its employees to Advantage, effective December 31, 2011. To further reduce administrative costs, Lions Capital Partner David Raffa has offered to transition out of the Fund as partner and Chief Operating Officer effective December 31, 2011. David will continue to work on his portfolio until the end of 2012 and which point he will transfer his fund management duties to remaining fund managers, Frank Holler and Jim Heppell. He has agreed to provide advisory input to the team thereafter if requested.

Advantage has also agreed to merge Advantage Venture Fund and Advantage Structured Fund I, under the name Advantage Structured Fund. The Advantage Structured Fund will retain the flexibility to provide dividends to its shareholders when the fund achieves realized gains in its investment portfolio. Lastly, Advantage has agreed to terminate the payment of trailer fees relating to shares of Advantage that are redeemable under the Small Business Venture Capital Act. Trailer fees relating to shares that are not redeemable will continue to be paid. All these steps are being taken to allow Advantage to further reduce its administrative costs in order to retain as much value as possible for future fund redemptions.

David Raffa, Lions Capital Partner, said, "The current state of financial markets has made it very difficult to achieve liquidity in our venture capital investments. The loan from Beedie Capital and our cumulative steps to substantially reduce administrative costs give Advantage the best possible opportunity to realize value from our portfolio investments and provide liquidity to our shareholders."

About Advantage

BC Advantage Funds (VCC) Ltd. is a venture capital corporation, formed under the Small Business Venture Capital Act (British Columbia), to invest in emerging technology companies in the Province. For more information about Advantage, please visit our website at www.bcadvantagefunds.com.

Contact Information