Harris & Harris Group, Inc. announced today that it has agreed in principle to liquidate its 20 percent interest in privately owned PHZ Capital Partners L.P. PHZ organizes and manages investment partnerships utilizing its proprietary algorithms. PHZ's assets under management and PHZ's capital are currently at all-time highs, and the liquidation of Harris & Harris Group's interest is expected to have no effect on PHZ's operations.
The agreement to liquidate Harris & Harris Group's interest is subject to execution of final documentation; thus there can be no assurance that the liquidation of Harris & Harris Group's interest will be consummated. As contemplated, the liquidation of Harris & Harris Group's interest would be at a premium to its capital account book value at December 31, 2002. Harris & Harris Group has historically valued its interest in PHZ at its capital account book value. Harris & Harris Group will now value its interest in PHZ at a premium to its capital account book value, effective with Harris & Harris Group's next valuation of its assets, which will be for the period ended September 30, 2002. If consummated, the contemplated liquidation of Harris & Harris Group's interest would take place as of December 31, 2002. Thus, the amount of cash and the tax effects that the liquidation of Harris & Harris Group's interest would generate would be determined upon closing of PHZ's books for the year 2002 and completion of Harris & Harris Group's annual audit for the year 2002.
Harris & Harris Group, Inc. invested $720,000 as the seed investor in PHZ in 1995. To date, PHZ has paid out to Harris & Harris Group a total of $2,045,680 in partnership cash distributions. At June 30, 2002, the most recent date at which Harris & Harris Group valued its investments, it valued its interest in PHZ at its capital account book value of $3,492,547. This capital account book value was reduced by a cash distribution of $307,044 to Harris & Harris Group on September 9, 2002.
Harris & Harris Group, Inc. is a Business Development Company with 11,498,845 common shares outstanding.
Detailed information about Harris & Harris Group, Inc. and its holdings can be found on its website at http://www.tinytechvc.com.
This press release may contain statements of a forward-looking nature relating to future events. Statements contained in this press release that are forward looking statements are intended to be made pursuant to the Safe Harbor Provisions for the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the Company's current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release. Please see the Company's Annual Report on Form 10-K and recent Prospectus filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the Company's business, including but not limited to the risks and uncertainties associated with venture capital investing and other significant factors that could affect the Company's actual results. Except as otherwise required by Federal securities laws, Harris & Harris Group, Inc. undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.