For investors

ESGTI’s NAV Calculation Agent calculates the fair value of every single investment on a regular basis. The calculation takes into consideration all assets and liabilities on a pro rata basis, accrued expenses and accrued income incurred by the Company (e.g. interest on cash, if any). The fair value of investments is calculated on the basis of the following principles and guidelines:

Valuation of public companies

For the purpose of the net asset value calculation of public companies, the closing bid price on the reporting day as reported by the exchange where the stock is quoted and traded is used.

Valuation of private companies

For the purpose of the fair value calculation of private companies the following principles apply:

Most important valuation factors

• Performance-based terms & structures
• Price negotiation and action
• Experience and performance of management
• Existing tangible and intangible assets
• Technology validation
• Last paid price
• Financial forecasts
• Market potential, position within market
• Comparison to competitors

The original cost or the subsequent capital increase price is considered an approximation of the fair value at the time of the transaction.

Start-up capital

Technology assessment, negotiations with management, industry comparables and competitors’ bids are the main factors that affect the valuation. Net asset value calculation at cost, less any write-off deemed necessary if subsequent performance is below business plan.

Capital increase

Re-evaluation of technology assessment, negotiations with management, industry comparables and competitors’ bids, achievement of milestones and business plan guidelines. Net asset value calculation is principle based on the capital increase price less discount, if deemed necessary based on the valuation factors listed below.

Write up

A write up is recognized when a significant event occurs such as the issuing of a patent, corporate partnering, increased profitability and achievement of milestones.

Write down

A write down is recognized when a significant event occurs such as a permanent impairment of assets, performance significantly below the business plan and a change in the valuation of comparable companies. Furthermore, it has to be taken into consideration that private companies are not subject to any external (thirdparty) valuation procedures, and the intrinsic value may therefore be difficult to assess. The valuation of the private investments as shown in the report is made by the Company according to above guidelines. The valuation may change from day to day depending on the Company’s development and market circumstances. However, the risk remains, that the valuations are not accurate and can change any day.

Description of valuations

Public companies

Public companies are valued at the closing bid price each day. These investments are subject to general stock market conditions.

Private Companies

Valuations are based on the company’s status at a given date. Increases in valuations are due to achievements of milestones, capital increases or other significant positive business developments. Companies valued at cost have generally achieved the expected milestones.

Decreases in valuations are generally due to financial market conditions, unfavorable capital increases and the company generally being behind plan.

Independent valuations

For the most important investments, ESGTI is based on at least annual external evaluations by independent experts.