TIDMJZCP TIDMJZCN TIDMJZCC 
 
JZ CAPITAL PARTNERS LIMITED (the "Company" or "JZCP") 
 
(a closed-end investment company incorporated with limited liability under the 
                laws of Guernsey with registered number 48761) 
 
                INTERIM RESULTS FOR THE SIX-MONTH PERIODED 
 
                                31 AUGUST 2021 
 
                           LEI: 549300TZCK08Q16HHU44 
 
(Classified Regulated Information, under DTR 6 Annex 1 section 1.2) 
 
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET 
ABUSE REGULATION (EU) NO. 596/2014 WHICH FORMS PART OF UK LAW BY VIRTUE OF THE 
EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"). 
 
11 November 2021 
 
JZ Capital Partners, the London listed fund that has investments in US and 
European micro-cap companies and US real estate, announces its interim results 
for the six-month period ended 31 August 2021. 
 
Investment Policy and Liquidity 
 
  * The Company continues to focus on implementing its New Investment Policy 
    whereby the Company will make no further investments outside of its 
    existing obligations or to the extent which an investment may be made to 
    support an existing portfolio company. 
  * The Company's objective continues to be realizing the maximum value from 
    its investment portfolio and, after repaying its debt obligations 
    (including the approx. $79.3 million of Zero Dividend Preference Shares 
    ("ZDPs") due 1 October 2022), returning capital to shareholders. 
  * The US and European micro-cap portfolios have continued to perform solidly, 
    delivering a net increase of 10 and 3 cents per share, respectively, and 
    both portfolios are working towards several realizations. 
  * To meet this challenge and afford the Company more time to maximise the 
    value of its portfolio and bring these businesses to market, the following 
    transactions have taken place in regard to the Company's indebtedness: 
 
  *         The Company realized its investment in Salter Labs for net proceeds 
    of approx. $41 million, of which approx.$33 million was applied in 
    reduction of the Senior Debt; 
  * In consequence, the amount outstanding in respect of the Senior Debt (owned 
    by clients and funds advised and sub-advised by Cohanzick Management, LLC 
    and CrossingBridge Advisors, LLC ("Cohanzick") was reduced from $68.7 
    million to $36.6 million during the period. The remaining balance of the 
    Senior Debt is currently due on 12 June 2022; 
  * The Company has drawn down $31.5 million of subordinated notes maturing on 
    11 September 2022 under the Note Purchase Agreement Facility ("NPA") made 
    available by affiliates of Jay Jordan and David Zalaznick, as approved by 
    shareholders; and 
  * £38.8 million of Convertible Unsecured Loan Stock ("CULS") was redeemed on 
    their maturity date of 30 July 2021. 
  * In addition, on 7 October 2021 (post-period end), the Company agreed with 
    Cohanzick to borrow a further $16 million under the Senior Debt facility to 
    provide additional liquidity to help the Company deliver on its New 
    Investment Policy. 
 
Outlook 
 
  * The Board believes that the restructuring of JZCP's Senior Debt and 
    liquidity facility agreed with the JZAI Founders will significantly 
    increase the Company's ability to execute its New Investment Policy. 
  * However, JZCP's Senior Debt and the new liquidity facility mature prior to 
    the 1 October 2022 redemption date of the Company's zero dividend 
    preference shares. Unless these instruments are refinanced, extended, or, 
    as realisations permit, paid off, continued uncertainty will exist with 
    regards to their redemption. Several realisations are being worked on, but 
    there is no certainty as to their likely result or timing. 
  * As a result of JZCP's continued potential inability to redeem its debt on 
    its stated maturities, the Directors' report accompanying these results 
    disclose a material uncertainty as to the Company's ability to continue as 
    a going concern. 
 
David Macfarlane, Chairman of JZCP, said: "We have worked hard during the 
period to execute the New Investment Policy, intending to realise the maximum 
value of the Company's investments and, after repaying its debt obligations, 
returning capital to shareholders. 
 
The realisation of our investment in Salter Labs above NAV was a good result 
for the Company, and we continue to see good underlying performance from our US 
and European micro-cap portfolios, which are both working towards several 
realisations. However, the successful execution of the New Investment Policy 
remains dependent upon the timing, quantum and ultimate success of future 
realisations. As a result, additional time is needed to maximise the value of 
these realisations, which contributes to continued uncertainty regarding the 
Company's ability to meet its debt maturities. 
 
However, the Board firmly believes that the combination of the restructuring of 
the Company's Senior Debt, the new facility from the JZAI Founders, the 
repayment of the CULS, and the successful realisation of Salter Labs, represent 
a step forward in enabling the Company to maximise the value of its portfolio. 
 
The Board continues to be optimistic that all the Company's obligations will be 
repaid in full and that ultimately a significant amount of capital will be 
returned to shareholders." 
 
Market Abuse Regulation: 
 
The information contained within this announcement is inside information as 
stipulated under MAR. Upon the publication of this announcement, this inside 
information is now considered to be in the public domain. The person 
responsible for arranging the release of this announcement on behalf of the 
Company is David Macfarlane, Chairman. 
 
For further information: 
 
Ed Berry / Kit Dunford                   +44 (0)7703 330 199 / +44 (0)7717 417 
038 
FTI Consulting 
 
David Zalaznick                            +1 212 485 9410 
Jordan/Zalaznick Advisers, Inc. 
 
Sam Walden                                 +44 (0) 1481 745385 
Northern Trust International Fund Administration Services (Guernsey) Limited 
 
About JZ Capital Partners 
 
JZCP has investments in US and European micro-cap companies, as well as real 
estate properties in the US. 
 
JZCP's Investment Adviser is Jordan/Zalaznick Advisers, Inc. ("JZAI") which was 
founded by David Zalaznick and Jay Jordan in 1986. JZAI has investment 
professionals in New York, Chicago, London and Madrid. 
 
In August 2020, the Company's shareholders approved changes to the Company's 
investment policy. Under the new policy, the Company will make no further 
investments except in respect of which it has existing obligations and to 
continue selectively to support the existing portfolio. The intention is to 
realise the maximum value of the Company's investments and, after repayment of 
all debt, to return capital to shareholders. 
 
JZCP is a Guernsey domiciled closed-ended investment company authorised by the 
Guernsey Financial Services Commission. JZCP's shares trade on the Specialist 
Fund Segment of the London Stock Exchange. 
 
For more information please visit www.jzcp.com. 
 
Important Notice: 
 
This announcement includes statements that are, or may be deemed to be, 
"forward-looking statements". These forward-looking statements can be 
identified by the use of forward-looking terminology, including the terms 
"believes", "estimates", "anticipates", "expects", "intends", "may", "will" or 
"should" or, in each case, their negative or other variations or comparable 
terminology. These forward-looking statements relate to matters that are not 
historical facts. By their nature, forward-looking statements involve risks and 
uncertainties because they relate to events and depend on circumstances that 
may or may not occur in the future. Forward-looking statements are not 
guarantees of future performance. The Company's actual investment performance, 
results of operations, financial condition, liquidity, policies and the 
development of its strategies may differ materially from the impression created 
by the forward-looking statements contained in this announcement. In addition, 
even if the investment performance, result of operations, financial condition, 
liquidity and policies of the Company and development of its strategies, are 
consistent with the forward-looking statements contained in this announcement, 
those results or developments may not be indicative of results or developments 
in subsequent periods. These forward-looking statements speak only as at the 
date of this announcement. Subject to their legal and regulatory obligations, 
each of the Company, the Investment Adviser and their respective affiliates 
expressly disclaims any obligations to update, review or revise any 
forward-looking statement contained herein whether to reflect any change in 
expectations with regard thereto or any change in events, conditions or 
circumstances on which any statement is based or as a result of new 
information, future developments or otherwise. 
 
Chairman's Statement 
 
We present the results of the Company for the six-month period ended 31 August 
2021, which show that the Company's NAV fell from $4.25 at year-end 28 February 
2021 to $4.08 at 31 August 2021 ($4.60 at 31 August 2020). After finance and 
administration costs, this decrease is primarily attributable to a loss on our 
Esperante property, following the joint venture purchase price negotiated with 
affiliates of The Related Companies ("Related"). This write-down at Esperante 
and write-downs at two US micro-cap investments, Deflecto and New Vitality, 
were offset by the realisation of Salter Labs above NAV and continuing strong 
performance from the underlying portfolio investments in the JZHL Secondary 
Fund. 
 
Investment Policy and Liquidity 
 
The Company continues to focus on implementing its New Investment Policy, which 
is to say that the Company will make no further investments outside its 
existing obligations or to the extent that investments may be made to support 
certain selected portfolio companies. The Company's objective continues to be 
the realisation of the maximum value from its investment portfolio and, after 
repaying its debt obligations (including the £57.6 million (approximately $79.3 
million) of Zero Dividend Preference Shares ("ZDPs") due 1 October 2022), the 
return of capital to its shareholders. 
 
Following the arrangements described in my statement dated 18 May 2021 
accompanying the year-end results, the following transactions have taken place 
in regard to the Company's indebtedness: 
 
  * The Company realised its investment in Salter Labs for net proceeds of 
    approximately $41 million, of which approximately $33 million was applied 
    in reduction of the Senior Debt; 
  * In consequence, the amount outstanding in respect of the Senior Debt (owned 
    by clients and funds advised and sub-advised by Cohanzick Management LLC 
    and CrossingBridge Advisors LLC ("Cohanzick")) was reduced from $68.7 
    million at 28 February 2021 to $36.6 million at 31 August 2021. The 
    remaining balance of the Senior Debt is currently due on 12 June 2022; 
  * The Company has drawn down $31.5 million of subordinated notes payable on 
    11 September 2022 under the Note Purchase Agreement ("NPA") facility made 
    available by affiliates of Jay Jordan and David Zalaznick, as approved by 
    shareholders; and 
  * £38.8 million (appx. $54.1 million) of Convertible Unsecured Loan Stock 
    ("CULS") was redeemed on their maturity date of 30 July 2021 
 
In addition, as announced on 7 October 2021, the Company agreed with Cohanzick 
to borrow a further amount of $16 million under the Senior Debt facility. 
Whilst the Company's intention remains as being to realise the maximum value of 
its investments and, after repaying its debt obligations, to return capital to 
shareholders, the Company acknowledges that this is likely to be contingent on 
its ability to implement an alternative debt restructuring plan over an 
appropriate timeframe and, as a result, considers it prudent given the 
potential relative illiquidity of its investments to maintain sufficient cash 
liquidity to support its existing portfolio investments and obligations as they 
fall due, including the Senior Debt which remains as maturing on 12 June 2022, 
the subordinated loan notes which mature on 11 September 2022 and the 
redemption of its ZDPs which fall due on 1 October 2022. 
 
Accordingly, the increase in the amount of the Senior Debt is intended to 
provide such liquidity to help enable the Company to maximise the value of its 
investments and to meet its obligations as they fall due. The Company remains 
committed to the delivery of its investment policy and has confirmed that the 
increase in the loan amount will be used in a manner consistent with that 
policy. 
 
However, at this time, the Senior Debt and the subordinated notes payable under 
the NPA facility mature prior to the redemption date of the ZDPs. Unless these 
three instruments are refinanced, extended, or, as realisations permit, paid 
off, continued uncertainty will exist with regards to their redemption. Several 
potential realisations are being worked on, but there is no certainty as to 
their likely result or timing. As a result of the Company's continued potential 
inability to redeem its debt securities on their respective maturity dates, the 
Report of the Directors accompanying these results discloses a material 
uncertainty as to the Company's ability to continue as a going concern. 
 
US and European Micro-cap Portfolios 
 
Our US and European micro-cap portfolios continue to perform solidly and we are 
working towards several realizations in both portfolios. During the period, the 
Company realised its investment in Salter Labs well above NAV, netting the 
Company $41 million in proceeds. Also during the period, JZCP received 
approximately $6.2 million in proceeds from selling down the "funded portion" 
of its commitment to the Orangewood Fund as well as from investor 
re-allocations from the final close of the Orangewood Fund. JZCP has now sold 
down its entire commitment to the Orangewood Fund. 
 
Real Estate Portfolio 
 
As previously discussed, the Company's two remaining real estate assets that 
have equity value are 247 Bedford Avenue in Brooklyn, New York (where Apple is 
the principal tenant), and the Esperante office building in West Palm Beach, 
Florida. 
 
With regards to Esperante, we are pleased to have closed a joint venture 
agreement with Related, led by Stephen Ross; we continue to believe that a 
partnership with Related will create significant additional value for JZCP at 
Esperante going forward. As part of the joint venture, Related purchased 49.9% 
of the equity of Esperante, while the current ownership (which includes JZCP) 
retained 50.1% of the equity. In the context of this transaction, JZCP realised 
a loss based on the joint venture purchase price negotiated with Related. We 
will be commissioning a new appraisal for Esperante at year-end (28 February 
2022), which we expect will reflect the continuously improving market 
environment in West Palm Beach, Florida, and look forward to reporting on our 
progress with Related in the coming months. 
 
Outlook 
 
The outlook remains similar, albeit improved, to when we reported at the time 
of the annual results. The realisation of our investment in Salter Labs was a 
very successful result; however, the execution of the New Investment Policy 
depends upon the timing and quantum of further realisations. The Board believes 
that the arrangements described above represent a step forward in enabling the 
Company to maximise the value of and to realise its investment portfolio. The 
Board continues to be optimistic that all the Company's obligations will be 
repaid in full and that ultimately a significant amount of capital will be 
returned to shareholders. 
 
David Macfarlane 
 
Chairman 
 
10 November 2021 
 
Investment Adviser's Report 
 
Dear Fellow Shareholders, 
 
We continue to make substantial progress towards our stated goal of realizing 
investments to generate cash to pay debt, relieving JZCP of unfunded 
commitments and supporting our existing portfolio to maximize returns to 
shareholders. 
 
Specifically, we agreed the extension of JZCP's remaining senior debt through 
June 2022. Furthermore, we agreed to personally provide a $31.5 million 
liquidity facility at 6.0% interest to JZCP (i.e., at the same rate as the 
CULS), which was approved by shareholders. Along with $41 million in net 
proceeds from the successful Salter realization in June 2021, these two 
transactions enabled JZCP to pay off its CULS in full and on their stated due 
date while at the same time maintaining a cash cushion. Most recently, in 
October 2021, we increased our credit facility with clients and funds advised 
and sub-advised by Cohanzick Management LLC and CrossingBridge Advisors LLC 
("Cohanzick") by an additional $16 million. Taken together, these transactions 
will help afford us further time to maximize the value of our portfolio as we 
approach the extended maturity of the balance of our senior debt as well as the 
stated maturities of our subordinated notes and ZDPs. 
 
Our US and European micro-cap portfolios continue to perform solidly and we are 
working towards several realizations in both portfolios. 
 
With regards to our West Palm Beach office tower, Esperante, we are pleased to 
have closed a joint venture agreement with affiliates of The Related Companies 
("Related"); we continue to believe that a partnership with Related will create 
significant additional value for JZCP at Esperante going forward. 
 
As of 31 August 2021, our US micro-cap portfolio consisted of 15 businesses, 
which includes four 'verticals' and eight co-investments, across nine 
industries. Our European micro-cap portfolio consisted of 17 companies across 
six industries and seven countries. 
 
Net Asset Value ("NAV") 
 
JZCP's NAV per share decreased by 17 cents. or 4%, during the six-month period. 
 
NAV per Ordinary share as of 28 February 2021                                     $4.25 
 
Change in NAV due to capital gains and accrued income 
 
+ US Micro-cap                                                                     0.10 
 
+ European Micro-cap                                                               0.03 
 
- Real estate                                                                    (0.06) 
 
Other decreases in NAV 
 
- Change in fair value of CULS                                                   (0.03) 
 
- Net foreign exchange effect                                                    (0.03) 
 
- Finance costs                                                                  (0.10) 
 
- Expenses and taxation                                                          (0.08) 
 
NAV per Ordinary share as of 31 August 2021                                       $4.08 
 
The US micro-cap portfolio continued to perform well during the six-month 
period, delivering a net increase of 10 cents per share. This was primarily due 
to net accrued income of 4 cents and write-ups at co-investment Salter Labs (3 
cents) and the JZHL Secondary Fund portfolio (11 cents). Offsetting these 
increases were decreases at co-investments George Industries, New Vitality and 
Deflecto (1 cent, 1 cent and 6 cents, respectively). 
 
Our European portfolio also performed well during the period, posting an 
increase of 3 cents, due to net write-ups at European portfolio companies. 
 
The real estate portfolio experienced a decrease of 6 cents, primarily due to a 
one-time write-down occasioned by the difference between the Esperante 
property's last appraised value (August 31, 2020) and the implied joint venture 
purchase price negotiated with Related. We will be commissioning a new 
appraisal for Esperante at year- end (February 28, 2022), which we expect will 
reflect the continuously improving market environment in West Palm Beach, 
Florida. 
 
Returns 
 
                                      31.8.2021   28.2.2021   31.8.2020   31.8.2018   31.8.2016 
 
Share price (in GBP)                      £1.20       £0.78       £0.89       £4.44       £4.53 
 
NAV per share (in USD)                    $4.08       $4.25       $4.60       $9.82      $10.40 
 
NAV to market price                       59.5%       74.3%       74.1%       41.2%       43.0% 
discount 
 
                                                    6 month      1 year      3 year      5 year 
                                                     return      return      return      return 
 
Dividends paid (in USD)                                   -           -           -      $0.155 
 
Total Shareholders' return                            53.8%       34.8%     (73.0%)     (72.8%) 
(GBP)1 
 
Total NAV return per share                           (4.0%)     (11.3%)     (58.5%)     (60.2%) 
(USD)1 
 
Total Adjusted NAV return per share                  (4.0%)     (11.3%)     (59.0%)     (60.9%) 
(USD)1 
 
1 Total returns are cumulative and assume that dividends were reinvested. 
 
Portfolio Summary 
 
Our portfolio is well-diversified by asset type and geography, with 32 US and 
European micro-cap investments across eleven industries. The European portfolio 
itself is well-diversified geographically across Spain, Italy, Portugal, 
Luxembourg, Scandinavia and the UK. 
 
Below is a summary of JZCP's assets and liabilities at 31 August 2021 as 
compared to 28 February 2021. An explanation of the changes in the portfolio 
follows: 
 
US microcap portfolio                                           31.08.2021   28.02.2021 
                                                                   US$'000      US$'000 
                                                                   254,356      299,339 
 
European microcap portfolio                                        119,545      117,781 
 
Real estate portfolio                                               18,788       23,376 
 
Other investments                                                   23,147       23,147 
 
Total investments                                                  415,836      463,643 
 
Treasury bills                                                       3,395        3,394 
 
Cash                                                                41,187       59,784 
 
Total cash equivalents                                              44,852       63,178 
 
Other assets                                                           389           22 
 
Total assets                                                       460,807      526,843 
 
Zero Dividend Preference shares                                     75,014       74,303 
 
Senior debt facility                                                36,629       68,694 
 
Loans Notes                                                         31,669            - 
 
Convertible Unsecured Loan Stock                                         -       52,430 
 
Other liabilities                                                    1,244        1,857 
 
Total liabilities                                                  144,556      197,284 
 
Net Asset Value                                                    316,251      329,559 
 
US microcap portfolio 
 
As you know from previous reports, our US portfolio is grouped into industry 
'verticals' and co-investments. As of December 4, 2020, certain of our 
verticals and co-investments are now grouped under JZHL Secondary Fund, LP 
("JZHL" or the "Secondary Fund"). JZCP has a continuing interest in the 
Secondary Fund through a special limited partnership interest, which entitles 
JZCP to certain distributions from the Secondary Fund. 
 
Our 'verticals' strategy focuses on consolidating businesses under industry 
executives who can add value via organic growth and cross company synergies. 
Our co-investments strategy allows for greater diversification of our portfolio 
by investing in larger companies alongside well-known private equity groups. 
 
The US micro-cap portfolio continued to perform well during the six-month 
period, delivering a net increase of 10 cents per share. This was primarily due 
to net accrued income of 4 cents and write-ups at co-investment Salter Labs (3 
cents) and the JZHL Secondary Fund portfolio (11 cents). 
 
Offsetting these increases were decreases at co-investments George Industries, 
New Vitality and Deflecto (1 cent, 1 cent and 6 cents, respectively). 
 
European microcap portfolio 
 
Our European portfolio also performed well during the period, posting an 
increase of 3 cents, due to net write-ups at European portfolio companies. 
 
JZCP invests in the European micro-cap sector through its approximately 18.8% 
ownership of Fund III. As of 31 August 2021, Fund III held 13 investments: five 
in Spain, two in Scandinavia, two in Italy, two in the UK and one each in 
Portugal and Luxembourg. JZCP held direct loans to a further three companies in 
Spain: Docout, Xacom and Toro Finance. 
 
JZAI has offices in London and Madrid and an outstanding team with over fifteen 
years of experience investing together in European micro-cap deals. 
 
Real estate portfolio 
 
The Company's two remaining real estate assets that have equity value are 247 
Bedford Avenue in Brooklyn, New York (where Apple is the principal tenant), and 
the Esperante office building in West Palm Beach, Florida. 
 
With regards to our real estate property, Esperante, we are pleased to have 
closed a joint venture agreement with affiliates of Related, led by Stephen 
Ross; we continue to believe that a partnership with Related will create 
significant additional value for JZCP at Esperante going forward. 
 
As part of the joint venture, Related purchased 49.9% of the equity of 
Esperante, while the current ownership (which includes JZCP) retained 50.1% of 
the equity. In the context of this transaction, JZCP experienced a one- time 
write-down occasioned by the difference between the property's last appraised 
value (August 31, 2020) and the implied joint venture purchase price negotiated 
with Related. We will be commissioning a new appraisal for Esperante at 
year-end (February 28, 2022), which we expect will reflect the continuously 
improving market environment in West Palm Beach, Florida, and look forward to 
reporting on our progress with Related in the coming months. 
 
Other investments 
 
Our asset management business in the US, Spruceview Capital Partners, has 
continued to make encouraging progress since our last report to you. Spruceview 
addresses the growing demand from corporate pensions, endowments, family 
offices and foundations for fiduciary management services through an Outsourced 
Chief Investment Officer ("OCIO") model as well as customized products/ 
solutions per asset class. 
 
Spruceview's third private markets fund, focused on co-investment opportunities 
in the US, ended the period with commitments of over $70 million. The firm also 
received additional commitments to its second private markets fund, bringing 
total commitments to $85 million, as well as additional contributions to the 
pension plans to which it provides advisory services. 
 
During the period, Spruceview also maintained a pipeline of potential client 
opportunities and continued to provide investment management oversight to the 
pension funds of the Mexican and Canadian subsidiaries of an international 
packaged foods company, as well as portfolios for family office clients, and a 
growing series of private market funds. 
 
As previously reported, Richard Sabo, former Chief Investment Officer of Global 
Pension and Retirement Plans at JPMorgan and a member of that firm's executive 
committee, is leading a team of 17 investment, business and product 
development, legal and operations professionals. 
 
Realisations 
 
Orangewood Fund 
 
During the six-month period, JZCP received approximately $6.2 million in 
proceeds from selling down the "funded portion" of its commitment to the 
Orangewood Fund as well as from investor re-allocations from the final close of 
the Orangewood Fund. JZCP has now sold down its entire commitment to the 
Orangewood Fund. 
 
Salter Labs 
 
In June 2021, JZCP received a $41 million distribution from the sale of Salter. 
 
George 
 
In April 2021, JZCP sold its investment in George, receiving approximately $9.5 
million in sale proceeds. 
 
Outlook 
 
We believe that JZCP's outlook continues to improve significantly. The US and 
European microcap portfolios have performed well and our expectation remains 
that they will contribute to future NAV growth of the Company. 
 
We have restructured JZCP's senior debt to allow for the repayment of the CULS. 
This was accomplished by extending the maturity of our senior loan by one year 
and by affiliates of the Investment Adviser making available a $31.5 million 
credit facility at 6.0% interest (i.e., the same rate as the CULS) to the 
Company. This facility matures behind the extended senior debt and in front of 
the ZDPs. 
 
We see significant value to be realized from our US and European microcap 
portfolios and will continue to selectively invest in these portfolios, in 
accordance with the new investment policy, to maximize their values. We believe 
this is the most effective way for us to be able to return significant capital 
to our ordinary shareholders. We continue to pursue several realizations and 
look forward to making announcements regarding these potentially significant 
liquidity events in the near future. 
 
Thank you again for your continued support through a difficult period. We 
remain dedicated to maximizing value for our fellow shareholders. 
 
Yours faithfully, 
 
Jordan/Zalaznick Advisers, Inc. 
 
10 November 2021 
 
Board of Directors 
 
David Macfarlane (Chairman)1 
 
Mr Macfarlane was appointed to the Board of JZCP in 2008 as Chairman and a 
non-executive Director. Until 2002 he was a Senior Corporate Partner at 
Ashurst. He was a non-executive director of the Platinum Investment Trust Plc 
from 2002 until January 2007. 
 
James Jordan 
 
Mr Jordan is a private investor who was appointed to the Board of JZCP in 2008. 
He is a director of the First Eagle family of mutual funds, and of Alpha 
Andromeda Investment Trust Company, S.A. Until 30 June 2005, he was the 
managing director of Arnhold and S. Bleichroeder Advisers, LLC, a privately 
owned investment bank and asset management firm; and until 25 July 2013, he was 
a non-executive director of Leucadia National Corporation. He is an Overseer of 
the Gennadius Library of the American School of Classical Studies in Athens, 
and a Director of Pro Natura de Yucatan. 
 
Sharon Parr2 
 
Mrs Parr was appointed to the Board of JZCP in June 2018. In 2003 she completed 
a private equity backed MBO of the trust and fund administration division of 
Deloitte and Touche, called Walbrook, selling it to Barclays Wealth in 2007. As 
a Managing Director of Barclays, she ultimately became global head of their 
trust and fund administration businesses, comprising over 450 staff in 10 
countries. She stepped down from her executive roles in 2011 to focus on other 
areas and interests but has maintained directorships in several companies. She 
is a Fellow of the Institute of Chartered Accountants in England and Wales and 
a member of the Society of Trust and Estate Practitioners, and is a resident of 
Guernsey. 
 
Ashley Paxton 
 
Mr Paxton was appointed to the board in August 2020. He has more than 25 years 
of funds and financial services industry experience, with a demonstrable track 
record in advising closed-ended London listed boards and their audit committees 
on IPOs, capital market transactions, audit and other corporate governance 
matters. He was previously C.I. Head of Advisory for KPMG in the Channel 
Islands, a position he held from 2008 through to his retirement from the firm 
in 2019. He is a Fellow of the Institute of Chartered Accountants in England 
and Wales and a resident of Guernsey. Amongst other appointments he is Chairman 
of the Youth Commission for Guernsey & Alderney, a locally based charity whose 
vision is that all children and young people in the Guernsey Bailiwick are 
ambitious to reach their full potential. 
 
1Chairman of the nominations committee of which all Directors are members. 
 
2Chairman of the audit committee of which all Directors are members. 
 
Report of the Directors 
 
Statement of Directors' Responsibilities 
 
The Directors are responsible for preparing the Interim Report and Financial 
Statements comprising the Half-yearly Interim Report (the "Interim Report") and 
the Unaudited Condensed Interim Financial Statements (the "Interim Financial 
Statements") in accordance with applicable law and regulations. 
 
·      the Interim Financial Statements have been prepared in accordance with 
IAS 34, "Interim Financial Reporting" as adopted in the European Union and give 
a true and fair view of the assets, liabilities, financial position and profit 
or loss of the Company; and 
 
·      the Chairman's Statement and Investment Adviser's Report include a fair 
review of the information required by: 
 
(i)   DTR 4.2.7R of the Disclosure Guidance and Transparency Rules of the 
United Kingdom's Financial Conduct Authority, being an indication of important 
events that have occurred during the first six months of the financial year and 
their impact on the Interim Financial Statements; and a description of the 
principal risks and uncertainties for the remaining six months of the year; and 
 
(ii)  DTR 4.2.8R of the Disclosure Guidance and Transparency Rules of the 
United Kingdom's Financial Conduct Authority, being related party transactions 
that have taken place in the first six months of the financial year and that 
have materially affected the financial position or the performance of the 
entity during that period; and any changes in the related party transactions 
described in the 2021 Annual Report and Financial Statements that could do so. 
 
Principal Risks and Uncertainties 
 
The Company's Board believes the principal risks and uncertainties that relate 
to an investment in JZCP are as follows: 
 
Portfolio Liquidity 
 
The Company invests predominantly in unquoted companies and real estate. 
Therefore, this potential illiquidity means there can be no assurance 
investments will be realised at their latest valuation or on the timing of such 
realisations. The Board considers this illiquidity when planning to meet its 
future obligations, whether committed investments or the repayment of the 
Senior Debt Facility, Loan Notes and Zero Dividend Preference ("ZDP") shares. 
On a quarterly basis, the Board reviews a working capital model produced by the 
Investment Adviser which highlights the Company's projected liquidity and 
financial commitments. 
 
COVID-19 
 
Whilst reporting its annual results for the year ended 28 February 2021, the 
Board disclosed in its Going Concern Assessment, that the encouraging 
performance of the micro-cap portfolios in the face of unprecedented 
circumstances gave the Board confidence in the valuation of the portfolios and 
the potential for growth and future valuation uplifts. The Board has confidence 
that the micro-cap portfolios are continuing to perform robustly but are 
mindful that market conditions mean that realisations may be delayed or become 
more difficult. 
 
NAV Factors 
 
(i) Macroeconomic Risks 
 
The Company's performance, and underlying NAV, is influenced by economic 
factors that affect the demand for products or services supplied by investee 
companies and the valuation of Real Estate interests held. Economic factors 
will also influence the Company's ability to realise investments and the level 
of realised returns. As at 31 August 2021, 28.5% (28 February 2021: 25.2%) of 
the Company's investments are denominated in non- US dollar currencies, 
primarily the Euro. Also, the Company's ZDP shares are denominated in Sterling. 
Fluctuations to these exchange rates will affect the NAV of the Company. 
 
(ii) Underlying Investment Performance 
 
The Company is reliant on the Investment Adviser to support the Company's 
investment portfolio by executing suitable investment decisions. The Investment 
Adviser provides the Board with an explanation of all investment decisions and 
also provides quarterly investment reports and valuation proposals of investee 
companies. The Board reviews investment performance quarterly and investment 
decisions are checked to ensure they are consistent with the agreed investment 
strategy. 
 
Share Price Trading at Discount to NAV 
 
JZCP's share price is subject to market sentiment and will also reflect any 
periods of illiquidity when it may be difficult for shareholders to realise 
shares without having a negative impact on share price. The Directors review 
the share price in relation to Net Asset Value on a regular basis and determine 
whether to take any action to manage the discount. The Directors, with the 
support of the Investment Adviser, work with brokers to maintain interest in 
the Company's shares through market contact and research reports. 
 
Gearing and Financing Costs in the Real Estate Portfolio 
 
The cost of servicing debt in the underlying real estate structures may impact 
the net valuation of the real estate portfolio and subsequently the Company's 
NAV. Gearing in the underlying real estate structures will increase any losses 
arising from a downturn in property valuations. 
 
Operational and Personnel 
 
Although the Company has no direct employees, the Company considers what 
dependence there is on key individuals within the Investment Adviser and 
service providers that are key to the Company meeting its operational and 
control requirements. 
 
The Board considers the principal risks and uncertainties above are broadly 
consistent with those reported at the prior year end, but wish to note the 
following: 
 
  * The Board recognises the Company will have an increased exposure to 
    liquidity risk as future debt obligations near maturity. 
  * Gearing and the finance costs within the real estate portfolio have become 
    less of a future risk to the Company as the current valuation of $18.8 
    million (28 February 2021: $23.4 million) now reflects the majority of 
    write downs that could be attributed by the gearing structure and costs 
    incurred. 
  * The effect of COVID-19 on market conditions means that there are challenges 
    to completing corporate transactions and planned realisations may be 
    delayed. This uncertainty is considered when the Board assesses  the 
    Company's ability to generate sufficient realisation proceeds to meet its 
    financial obligations. 
 
Going Concern 
 
A fundamental principle of the preparation of financial statements in 
accordance with IFRS is the judgement that an entity will continue in existence 
as a going concern for a period of at least 12 months from signing of the 
Interim Financial Statements, which contemplates continuity of operations and 
the realisation of assets and settlement of liabilities occurring in the 
ordinary course of business. 
 
Due to the uncertainties that the Company will not have sufficient liquidity to 
repay its Senior Debt Facility (due 12 June 2022), Loan Notes (due 11 September 
2022) and redeem its ZDP shares (due 1 October 2022) there are material 
uncertainties which cast significant doubt on the ability of the Company to 
continue as a going concern. However, the Interim Financial Statements for the 
period ended 31 August 2021 have been prepared on a going concern basis given 
the Board's assessment of future realisations and the Company's expected 
ability to restructure and extend the maturity of debt obligations in line with 
forecasted cash flows. The Board, with recommendation from the Audit Committee, 
has a reasonable expectation that the Company has adequate resources to 
continue in operational existence for the foreseeable future. 
 
In reaching its conclusion, the Board has considered the risks that could 
impact the Company's liquidity over the period from 10 November 2021 to 10 
November 2022 (the "going concern period") being 12 months from the signing of 
the Interim Financial Statements. 
 
As part of their assessment, the Audit Committee highlighted the following key 
consideration: 
 
Whether if required, the Company can implement an alternative debt 
restructuring plan that will enable the Company to repay its debt obligations, 
including the redemption of its ZDP shares, over an extended timeframe. The 
extent of the debt restructuring will be dependent on the cash amounts 
generated through realisations of its underlying investments throughout the 
going concern period. 
 
Recent events impacting liquidity 
 
  * The repayment of $33.3 million of the Senior Debt Facility following a 
    material realisation and the lenders also agreed to the extension of the 
    maturity date of the Senior Debt Facility to 12 June 2022. 
  * The issue of Loan Notes totalling $31.5 million repayable 11 September 
    2022. 
  * The redemption of the Company's CULS (£38.8 million) on 30 July 2021. 
  * Post period end, the Company agreed with its existing senior lenders to 
    borrow a further amount of $16.0 million under its Senior Debt Facility. 
    Following the increase, the total amount outstanding under the Senior Debt 
    Facility is approx.$52.6 million. 
 
Update on material liabilities due for settlement 
 
The below table shows the Company's net debt position at 31 October 2021 versus 
the prior year end and interim reporting date. 
 
                                                           31.10.2021 28.2.2021  31.8.2020 
 
                                                                $'000     $'000      $'000 
 
ZDP Shares - maturity date 1 October 2022 - redemption         78,951    80,527     76,610 
amount of £57.6 million1 
 
Loan Notes - maturity date 11 September 20222                  31,673         -          - 
 
Senior Debt Facility - extended maturity date 12 June          52,563    68,694    150,355 
2022 
 
CULS - maturity date 30 July 2021 - redemption amount of            -    54,332     52,033 
£38.8 million 
 
Total debt                                                    163,187   203,553    278,998 
 
Cash and cash equivalents held                                 62,553    63,178     39,051 
 
Net debt position                                             100,634   140,375    239,947 
 
1ZDP and CULS maturity dollar amount translated using the relevant period end 
exchange rate. 
 
2Includes accrued interest 
 
Realisations 
 
The below table shows the Company's realisations over the twelve month period 
ending 31 August 2021: 
 
Asset                                                      Portfolio        Proceeds ($ 
                                                                              millions) 
 
Secondary Sale                                             US                      87.7 
 
Salter Labs (includes $4.4 million from refinancing in     US                      45.5 
September 2020) 
 
Greenpoint                                                 Real estate             13.6 
 
George Industries                                          US                       9.5 
 
Orangewood Fund                                            US                       6.2 
 
Fund III distributions                                     European                 0.7 
 
Total                                                                             163.2 
 
The Company continues to work on the realisation of various investments within 
a timeframe that will enable the Company to maximise the value of its 
investment portfolio. If it becomes apparent during quarter 1 of 2022 that 
realisation amounts, over the going concern period, will be insufficient to 
meet the Company's debt obligations, then the Company will look at 
opportunities to restructure its debt, to enable returns to be maximised and 
for debt obligations to be met over an extended timeframe. 
 
The Board continues to consider the levels of realisation proceeds historically 
generated by the Company's micro- cap portfolios as well as the accuracy of 
previous forecasts whilst concluding on the predicted accuracy of forecasts 
presented. 
 
The Board acknowledges that the new maturity date of the Senior Debt Facility 
and the Loan Notes still fall within the going concern period and therefore the 
Company will still need to generate sufficient realisation proceeds, within the 
period, to repay its debt obligations or make alternative debt arrangements 
with lenders. 
 
Considering the Company's projected cash position, ongoing operating costs, and 
the anticipated further investment required to support the Company's portfolio, 
the Board anticipates further proceeds of approx. $150 million are required to 
enable the Company to settle its debts as they fall due. 
 
Going Concern Conclusion 
 
After careful consideration and based on an assessment of future realisations, 
the Board is satisfied, as of today's date, that it is appropriate to adopt the 
going concern basis in preparing the financial statements and they have a 
reasonable expectation that the Company will continue in existence as a going 
concern for the period to 10 November 2022. 
 
However, the Board has determined that there is a material uncertainty 
surrounding the Company's ability to generate sufficient liquidity to repay its 
Senior Debt Facility (due 12 June 2022), Loan Notes (due 11 September 2022) and 
repay its ZDP shares (due 1 October 2022) which casts significant doubt over 
the ability of the Company to continue as a Going Concern, based on the 
following key consideration: 
 
Whether if required, the Company can implement an alternative debt 
restructuring plan that will enable the Company to repay its debt obligations, 
including the redemption of its ZDP shares, over an extended timeframe. The 
extent of the debt restructuring will be dependent on the cash amounts 
generated through realisations of its underlying investments throughout the 
going concern period. 
 
The financial statements do not include any adjustments that might result from 
the outcome of these uncertainties. 
 
Approved by the Board of Directors and agreed on behalf of the Board on 10 
November 2021. 
 
David Macfarlane 
 
Chairman 
 
Sharon Parr 
 
Director 
 
Investment Portfolio 
 
                                                   31 August 2021             Percentage 
 
                                                Cost1            Value      of Portfolio 
 
                                              US$'000          US$'000                 % 
 
US Micro-cap portfolio 
 
US Micro-cap Fund 
 
JZHL Secondary Fund L.P.2 
 
JZHL Secondary Fund L.P. 
JZCP's investment in the JZHL Secondary 
Fund is further detailed below. 
 
Total JZHL Secondary Fund L.P. valuation       40,965           80,839              19.3 
 
US Micro-cap (Vertical) 
 
Industrial Services Solutions3 
 
INDUSTRIAL SERVICES SOLUTIONS ("ISS") 
Provider of aftermarket maintenance, 
repair, and field services for critical 
process equipment throughout the US 
 
Total Industrial Services Solutions            48,250           95,889              22.9 
valuation 
 
US Micro-cap (Co-investments) 
 
DEFLECTO                                       45,010           40,923               9.7 
Deflecto designs, manufactures and sells 
innovative plastic products to multiple 
industry segments 
 
IGLOO3                                          6,040              329               0.1 
Designer, manufacturer and marketer of 
coolers and outdoor products 
 
NEW VITALITY3                                   3,354           10,958               2.6 
Direct-to-consumer provider of 
nutritional supplements and personal 
care products 
 
ORIZON                                          3,899            7,000               1.7 
Manufacturer of high precision machine 
parts and tools for aerospace and 
defence industries 
 
VITALYST3                                       9,020            6,192               1.5 
Provider of outsourced IT support and 
training services 
 
Total US Micro-cap (Co-investments)            67,323           65,402              15.6 
 
US Micro-cap (Other) 
 
AVANTE HEALTH SOLUTIONS                         7,823           11,226               2.7 
Provider of new and professionally 
refurbished healthcare equipment 
 
HEALTHCARE PRODUCTS HOLDINGS                   17,636                -                 - 
Designer and manufacturer of motorised 
vehicles 
 
NATIONWIDE STUDIOS                             26,324            1,000               0.2 
Processor of digital photos for 
pre-schoolers 
 
Total US Micro-cap (Other)                     51,783           12,226               2.9 
 
Total US Micro-cap portfolio                  208,321          254,356              60.7 
 
European Micro-cap portfolio 
 
EUROMICROCAP FUND 2010, L.P.                      169            3,279               0.8 
Invested in European Micro-cap entities 
 
JZI FUND III, L.P.                              51,006          83,382              19.9 
JZCP's investment in JZI Fund III is further 
detailed below. 
 
Total European Micro-cap (measured at           51,175          86,661              20.7 
Fair Value) 
 
Debt Investments 
 
DOCOUT                                           2,777           4,113               1.0 
Provider of digitalisation, document 
processing and storage services 
 
TORO FINANCE                                    21,619          25,938               6.2 
Provides short term receivables finance 
to the suppliers of major Spanish 
companies 
 
XACOM                                            2,055           2,833               0.6 
Supplier of telecom products and 
technologies 
 
Debt Investments (classified at                 26,451          32,884               7.8 
amortised cost) 
 
Total European Micro-cap portfolio              77,626         119,545              28.5 
 
Real Estate portfolio 
 
247 BEDFORD AVENUE                              17,717            6,973              1.7 
Prime retail asset in northern Brooklyn, 
NY 
 
ESPERANTE                                       14,158           11,815              2.8 
An iconic building on the downtown, West 
Palm Beach skyline 
 
JZCP REALTY                                     53,266                -                - 
Other Properties held - no equity value 
 
Total Real Estate portfolio                     85,141           18,788              4.5 
 
Other investments 
 
BSM ENGENHARIA                                   6,115              459              0.1 
Brazilian-based provider of supply chain 
logistics, infrastructure services and 
equipment rental 
 
JZ INTERNATIONAL                                     -              750              0.2 
Fund of European LBO investments 
 
SPRUCEVIEW CAPITAL                              31,955           21,938              5.2 
Asset management company focusing 
primarily on managing endowments and 
pension funds 
 
Total Other investments                         38,070           23,147              5.5 
 
Listed investments 
 
U.S. Treasury Bill - Maturity 7 October          3,393            3,395              0.8 
2021 
 
Total Listed investments                         3,393            3,395              0.8 
 
Total - portfolio                              412,551          419,231            100.0 
 
 
¹Original book cost incurred by JZCP adjusted for subsequent transactions. 
Other than JZHL Secondary Fund (see foot note 2),the book cost represents cash 
outflows and excludes PIK investments. 
 
2 Notional cost of the Company's interest in JZHL Secondary Fund being $40.965 
million which is calculated in accordance with IFRS, and represents the fair 
value of the Company's LP interest on recognition. 
 
3 Co-investment with Fund A, a Related Party (Note 19). 
 
Summary of JZCP's investments in JZHL Secondary Fund 
 
                                                              JZHL Cost1            JZHL 
                                                         As at 31.8.2021       Valuation 
                                                                  $'000s           As at 
                                                                               31.8.2021 
                                                                                  $'000s 
 
US Micro-cap (Verticals) 
 
ACW FLEX PACK, LLC                                                11,205          10,000 
Provider of a variety of custom flexible packaging 
solutions to converters and end-users 
 
FLOW CONTROL, LLC                                                 15,115          25,839 
Manufacturer and distributor of high-performance, 
mission-critical flow handling 
 
TESTING SERVICES HOLDINGS                                         23,426          35,000 
Provider of safety focused solutions for the 
industrial, environmental and life science related 
markets, and testing, certification and validation 
services for cleanroom, critical environments and 
containment systems 
 
US Micro-cap (Co-investments) 
 
FELIX STORCH                                                      24,500          81,000 
Supplier of specialty, professional, commercial, 
and medical refrigerators and freezers,and cooking 
appliances 
 
PEACEABLE STREET CAPITAL                                          36,541          36,541 
Specialty finance platform focused on commercial 
real estate 
 
TIERPOINT                                                         46,813          46,813 
Provider of cloud computing and colocation data 
centre services 
 
                                                                 157,600         235,193 
 
Less interest of Hamilton Lane and other secondary                             (154,354) 
investments 
 
JZCP's interest in JZHL Secondary Fund                                            80,839 
 
1The cost of the JZHL's investments represent the agreed transfer value from 
JZCP to JZHL. 
 
Summary of JZCP's investments in JZI Fund III 
 
                                      Country     JZCP Cost     JZCP Value     JZCP Value 
                                                     (EURO)         (EURO)          (USD) 
                                                      As at          As at          As at 
                                                  31.8.2021      31.8.2021      31.8.2021 
                                                     ?'000s         ?'000s         ?'000s 
 
ALIANZAS EN ACEROS                     Spain          4,388          4,538          5,357 
Steel service center 
 
BLUESITES                            Portugal         3,140          4,594          5,423 
Build-up in cell tower land leases 
 
COLLINGWOOD                             UK            3,014          3,038          3,586 
Niche UK motor insurer 
 
ERSI                                    Lux           8,503          2,456          2,899 
Reinforced steel modules 
 
FACTOR ENERGIA                         Spain          3,653         10,162         11,996 
Electricity supplier 
 
FINCONTINUO                            Italy          5,075          8,287          9,782 
Niche consumer lender 
 
GUANCHE                                Spain          3,625          3,627          4,282 
Build-up of petrol stations 
 
KARIUM                                  UK            4,321         11,006         12,992 
Personal care consumer brands 
 
LUXIDA                                 Spain          3,315          4,781          5,644 
Build-up in electricity 
distribution 
 
MY LER                             Finland         4,861          4,500          5,312 
Niche consumer lender 
 
S.A.C                                 Denmark         3,487          7,725          9,119 
Operational van leasing 
 
TREEE                                  Italy          3,159          9,544         11,266 
e-waste recycling 
 
UFASA                                  Spain          5,108          6,574          7,760 
Niche consumer lender 
 
Other net Liabilities                                                            (12,036) 
 
Total valuation                                                                    83,382 
 
1Represents JZCP's 18.75% of Fund III's investment portfolio 
 
Independent Review Report to JZ Capital Partners Limited 
 
Conclusion 
 
We have been engaged by the Company to review the Unaudited Condensed Interim 
Financial Statements ("Interim Financial Statements") for the six months ended 
31 August 2021 which comprises the Statement of Comprehensive Income 
(Unaudited), Statement of Financial Position (Unaudited), Statement of Changes 
in Equity (Unaudited), Statement of Cash Flows (Unaudited) and related Notes 1 
to 22. We have read the other information contained in the Interim Report and 
considered whether it contains any apparent misstatements or material 
inconsistencies with the information in the Interim Financial Statements. 
 
Based on our review, nothing has come to our attention that causes us to 
believe that the Interim Financial Statements for the six months ended 31 
August 2021 are not prepared, in all material respects, in accordance with 
International Accounting Standard 34, "Interim Financial Reporting", as adopted 
by the European Union ("IAS 34"), and the Disclosure Guidance and Transparency 
Rules of the United Kingdom's Financial Conduct Authority. 
 
Basis for Conclusion 
 
We conducted our review in accordance with International Standard on Review 
Engagements 2410 (UK and Ireland) "Review of Interim Financial Information 
Performed by the Independent Auditor of the Entity" issued by the Auditing 
Practices Board. A review of interim financial information consists of making 
enquiries, primarily of persons responsible for financial and accounting 
matters, and applying analytical and other review procedures. A review is 
substantially less in scope than an audit conducted in accordance with 
International Standards on Auditing (UK) and consequently does not enable us to 
obtain assurance that we would become aware of all significant matters that 
might be identified in an audit. Accordingly, we do not express an audit 
opinion. 
 
As disclosed in Note 2, the annual financial statements of the Company are 
prepared in accordance with IFRS as adopted by the European Union. The Interim 
Financial Statements have been prepared in accordance with IAS 34. 
 
Material Uncertainty Related to Going Concern 
 
We draw your attention to Note 3 in the Interim Financial Statements, which 
states that there is material uncertainty surrounding the Company's ability to 
generate sufficient liquidity to repay its Senior Debt Facility (due 12 June 
2022) and Loan Notes (due 11 September 2022) and to redeem its ZDP shares (due 
1 October 2022) based on the following key considerations: i.) Whether the 
Company can generate sufficient cash through realisations of its underlying 
investments to discharge its liabilities over the period to 10 November 2022 
and ii.) Whether, in the event that sufficient realisation proceeds referenced 
above are not generated by the Company before the maturity dates of the debt 
obligations, including the redemption of the ZDP shares, the Company is able to 
implement an alternative debt restructuring plan to repay its debt obligations, 
including the redemption of the ZDP shares, over an extended timeframe. 
 
Our conclusion on the Interim Financial Statements based on our review is not 
modified in respect of this matter. 
 
Responsibilities of the Directors 
 
The Directors are responsible for preparing the Interim Report and Interim 
Financial Statements in accordance with the Disclosure Guidance and 
Transparency Rules of the United Kingdom's Financial Conduct Authority. 
 
Auditor's responsibilities for the review of the financial information 
 
In reviewing the Interim Report and Interim Financial Statements, we are 
responsible for expressing to the Company a conclusion on the Interim Financial 
Statements. Our conclusion is based on procedures that are less extensive than 
audit procedures, as described in the Basis for Conclusion paragraph of this 
report. 
 
Use of our report 
 
This report is made solely to the Company in accordance with guidance contained 
in International Standard on Review Engagements 2410 (UK and Ireland) "Review 
of Interim Financial Information Performed by the Independent Auditor of the 
Entity" issued by the Auditing Practices Board. To the fullest extent permitted 
by law, we do not accept or assume responsibility to anyone other than the 
Company, for our work, for this report, or for the conclusions we have formed. 
 
Ernst & Young LLP 
 
Guernsey, Channel Islands 
 
10 November 2021 
 
Notes 
 
 1. The Interim Report and Financial Statements are published on websites 
    maintained by the Investment Adviser. 
 2. The maintenance and integrity of these websites are the responsibility of 
    the Investment Adviser; the work carried out by the Auditors does not 
    involve consideration of these matters and, accordingly, the Auditor 
    accepts no responsibility for any changes that may have occurred to the 
    Condensed Interim Financial Statements since they were initially presented 
    on the website. 
 3. Legislation in Guernsey governing the preparation and dissemination of 
    Condensed Interim Financial Statements may differ from legislation in other 
    jurisdictions. 
 
Statement of Comprehensive Income (Unaudited) 
 
For the Period from 1 March 2021 to 31 August 2021 
 
                                                             Six Month         Six Month 
 
                                                          Period Ended      Period Ended 
 
                                                             31 August         31 August 
                                                                  2021              2020 
 
                                                Note           US$'000           US$'000 
 
Income and investment and other gains 
 
Investment Income                                8               9,119            12,697 
 
Bank and deposit interest                                           75               124 
 
Realisations from investments held in escrow     21                  -               801 
accounts 
 
                                                                 9,194            13,622 
 
Expenses and losses 
 
Net loss on investments at fair value through    6             (4,809)         (114,089) 
profit or loss 
 
Expected credit losses                           7             (1,405)             (560) 
 
Loss on financial liabilities at fair value      15            (1,869)           (2,836) 
through profit or loss 
 
Net foreign currency exchange losses                             (202)           (2,035) 
 
Investment Adviser's base fee                    10            (3,888)           (5,359) 
 
Administrative expenses                                        (2,154)           (2,151) 
 
Directors' remuneration                                          (145)             (150) 
 
                                                              (14,472)         (127,180) 
 
Operating loss                                                 (5,278)         (113,558) 
 
Finance costs                                    9             (6,981)           (9,190) 
 
Loss for the period                                           (12,259)         (122,748) 
 
Other comprehensive (loss)/income that will not be reclassified to the 
Income Statement 
 
(Loss)/gain on financial liabilities due to      15            (1,074)             3,290 
change in credit risk 
 
Total comprehensive loss for the period                       (13,333)         (119,458) 
 
Weighted average number of Ordinary shares in    20         77,474,670        77,474,175 
issue during the period 
 
Basic loss per Ordinary share                    20           (15.82)c         (158.44)c 
 
Diluted loss per Ordinary share                  20           (15.82)c         (158.44)c 
 
The accompanying notes form an integral part of the Interim Financial 
Statements. 
 
Statement of Financial Position (Unaudited) 
 
As at 31 August 2021 
 
                                                               31 August    28 February 
 
                                                                    2021           2021 
 
                                                 Note            US$'000        US$'000 
 
Assets 
 
Investments at fair value through profit or       11             386,347        433,224 
loss 
 
Loans at amortised cost                           11              32,884         33,813 
 
Other receivables                                                    389             22 
 
Cash at bank                                                      41,187         59,784 
 
Total assets                                                     460,807        526,843 
 
Liabilities 
 
Zero Dividend Preference shares                   12              75,014         74,303 
 
Loan notes                                        13              31,669              - 
 
Senior debt facility                              14              36,629         68,694 
 
Other payables                                    16               1,244          1,284 
 
Investment Adviser's base fee                     10                   -            573 
 
Convertible Unsecured Loan Stock                  15                   -         52,430 
 
Total liabilities                                                144,556        197,284 
 
Equity 
 
Share capital                                                    216,650        216,625 
 
Other reserve                                                    353,528        354,602 
 
Retained deficit                                               (253,927)      (241,668) 
 
Total equity                                                     316,251        329,559 
 
Total liabilities and equity                                     460,807        526,843 
 
Number of Ordinary shares in issue at period/     17          77,477,214     77,474,175 
year end 
 
Net asset value per Ordinary share                                 $4.08          $4.25 
 
These Interim Financial Statements were approved by the Board of Directors and 
authorised for issuance on 10 November 2021. They were signed on its behalf by: 
 
David Macfarlane 
 
Chairman 
 
Sharon Parr 
 
Director 
 
The accompanying notes form an integral part of the Interim Financial 
Statements. 
 
Statement of Changes in Equity (Unaudited) 
 
For the Period from 1 March 2021 to 31 August 2021 
 
                                                            Share       Other   Retained 
 
                                                          Capital     Reserve    Deficit       Total 
 
                                                Note      US$'000     US$'000    US$'000     US$'000 
 
Balance as at 1 March 2021                                216,625     354,602  (241,668)     329,559 
 
Loss for the period                                             -           -   (12,259)    (12,259) 
 
Loss on financial liabilities due to           15            -     (1,074)         -   (1,074) 
change in credit risk 
 
Issue of Ordinary shares                         17            25           -          -          25 
 
Balance at 31 August 2021                                 216,650     353,528  (253,927)     316,251 
 
Comparative for the Period from 1 March 2020 to 31 August 2020 
 
                                                            Share       Other   Retained 
 
                                                          Capital     Reserve    Deficit       Total 
 
                                                          US$'000     US$'000    US$'000     US$'000 
 
Balance at 1 March 2020                                   216,625     353,528   (94,419)     475,734 
 
Loss for the period                                             -           -  (122,748)   (122,748) 
 
Gain on financial liabilities due to change in credit        -       3,290         -     3,290 
risk 
 
Balance at 31 August 2020                                 216,625     356,818  (217,167)     356,276 
 
 
The accompanying notes form an integral part of the Interim Financial 
Statements. 
 
Statement of Cash Flows (Unaudited) 
 
For the Period from 1 March 2021 to 31 August 2021 
 
                                                               Six Month       Six Month 
 
                                                            Period Ended    Period Ended 
 
                                                               31 August       31 August 
                                                                    2021            2020 
 
                                                    Note         US$'000         US$'000 
 
Cash flows from operating activities 
 
Cash inflows 
 
Realisation of investments1                          11           56,929           3,016 
 
Maturity of treasury bills                           11                -           3,395 
 
Escrow receipts received                             21                -             801 
 
Interest received from unlisted investments                            -             249 
 
Income distributions received from investments                       234               - 
 
Bank interest received                                                75             124 
 
Cash outflows 
 
Direct investments and capital calls1                11          (7,381)         (5,714) 
 
Purchase of treasury bills                           11                -         (3,394) 
 
Investment Adviser's base fee paid                   10          (4,652)         (2,000) 
 
Investment Adviser's incentive fee paid              10                -         (2,307) 
 
Other operating expenses paid                                    (2,515)         (2,204) 
 
Net cash inflow/(outflow) before financing                        42,690         (8,034) 
activities 
 
Financing activities 
 
Repayment of Senior Debt Facility                               (33,264)               - 
 
Redemption of Convertible Unsecured Loan Stock                  (54,005)               - 
 
Issue of Loan Notes                                               31,500               - 
 
Finance costs paid: 
 
. Convertible Unsecured Loan Stock                               (2,679)         (1,445) 
 
. Senior Debt Facility                                           (2,385)         (7,863) 
 
Net cash outflow from financing activities                      (60,833)         (9,308) 
 
Decrease in cash at bank                                        (18,143)        (17,342) 
 
Reconciliation of net cash flow to movements in 
cash at bank 
 
                                                                 US$'000         US$'000 
 
Cash and cash equivalents at 1 March                              59,784          52,912 
 
Decrease in cash at bank                                        (18,143)        (17,342) 
 
Foreign exchange movements on cash at bank                         (454)              86 
 
Cash and cash equivalents at period end                           41,187          35,656 
 
¹Proceeds from realisations and cash outflows from investments and capital 
calls exclude $0.6 million being distributions from JZI Fund III netted off 
capital calls. 
 
The accompanying notes form an integral part of the Interim Financial 
Statements. 
 
Notes to the Interim Financial Statements (Unaudited) 
 
1.   General Information 
 
JZ Capital Partners Limited ("JZCP" or the "Company") is a Guernsey domiciled 
closed-ended investment company which was incorporated in Guernsey on 14 April 
2008 under the Companies (Guernsey) Law, 1994. The Company is now subject to 
the Companies (Guernsey) Law, 2008. The Company is classified as an authorised 
fund under the Protection of Investors (Bailiwick of Guernsey) Law 1987. The 
Company's Capital consists of Ordinary shares and Zero Dividend Preference 
("ZDP") shares. The Company had issued Convertible Unsecured Loan Stock 
("CULS"), which were redeemed on 30 July 2021. The Company's shares trade on 
the London Stock Exchange's Specialist Fund Segment ("SFS"). 
 
The Company's new investment policy, adopted in August 2020, is for the Company 
to make no further investments outside of its existing obligations or to the 
extent that investment may be made to support selected existing portfolio 
investments. The intention is to realise the maximum value of the Company's 
investments and, after repayment of all debt, to return capital to 
shareholders. The Company's previous Investment Policy was to target 
predominantly private investments and back management teams to deliver on 
attractive investment propositions. In executing this strategy, the Company 
took a long term view. The Company looked to invest directly in its target 
investments and was able to invest globally but with a particular focus on 
opportunities in the United States and Europe. 
 
The Company is currently mainly focused on supporting its investments in the 
following areas: 
 
(a)   small or micro-cap buyouts in the form of debt and equity and preferred 
stock in both the US and Europe; and 
 
(b)   real estate interests. 
 
The Company has no direct employees. For its services, the Investment Adviser 
receives a management fee as described in Note 10. The Company has no ownership 
interest in the Investment Adviser. During the period under review, the Company 
was administered by Northern Trust International Fund Administration Services 
(Guernsey) Limited. 
 
The Unaudited Condensed Interim Financial Statements (the "Interim Financial 
Statements") are presented in US$'000 except where otherwise indicated. 
 
2.   Significant Accounting Policies 
 
The accounting policies adopted in the preparation of these Interim Financial 
Statements have been consistently applied during the period, unless otherwise 
stated. 
 
Statement of Compliance 
 
The Interim Financial Statements of the Company for the period 1 March 2021 to 
31 August 2021 have been prepared in accordance with IAS 34, "Interim Financial 
Reporting" as adopted in the European Union, together with applicable legal and 
regulatory requirements of the Companies (Guernsey) Law, 2008 and the 
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial 
Conduct Authority. The Interim Financial Statements do not include all the 
information and disclosure required in the Annual Audited Financial Statements 
and should be read in conjunction with the Annual Report and Financial 
Statements for the year ended 28 February 2021. 
 
Basis of Preparation 
 
The Interim Financial Statements have been prepared under the historical cost 
basis, except for financial assets and financial liabilities held at fair value 
through profit or loss ("FVTPL"). The principal accounting policies adopted in 
the preparation of these Interim Financial Statements are consistent with the 
accounting policies stated in Note 2 of the Annual Financial Statements for the 
year ended 28 February 2021. The preparation of these Interim Financial 
Statements are in conformity with IAS 34, "Interim Financial Reporting" as 
adopted in the European Union, and requires the Company to make estimates and 
assumptions that affect the reported amounts of assets and liabilities at the 
date of the Interim Financial Statements and the reported amounts of revenues 
and expenses during the reporting period. Actual results could materially 
differ from those estimates. 
 
New standards, interpretations and amendments adopted by the Company 
 
The accounting policies adopted in the preparation of the Interim Financial 
Statements are consistent with those followed in the preparation of the 
Company's Annual Financial Statements for the year ended 28 February 2021, 
which were prepared in accordance with IFRS as adopted by the European Union. 
There has been no early adoption, by the Company, of any other standard, 
interpretation or amendment that has been issued but is not yet effective. 
 
3.   Estimates and Judgements 
 
The estimates and judgements made by the Board of Directors are consistent with 
those made in the Audited Financial Statements for the year ended 28 February 
2021. 
 
Directors' Assessment of Going Concern 
 
A fundamental principle of the preparation of financial statements in 
accordance with IFRS is the judgement that an entity will continue in existence 
as a going concern for a period of at least 12 months from signing of the 
Interim Financial Statements, which contemplates continuity of operations and 
the realisation of assets and settlement of liabilities occurring in the 
ordinary course of business. 
 
Due to the uncertainties that the Company will not have sufficient liquidity to 
repay its Senior Debt Facility (due 12 June 2022), Loan Notes (due 11 September 
2022) and redeem its ZDP shares (due 1 October 2022) there are material 
uncertainties which cast significant doubt on the ability of the Company to 
continue as a going concern. However, the Interim Financial Statements for the 
period ended 31 August 2021 have been prepared on a going concern basis given 
the Board's assessment of future realisations and the Company's expected 
ability to restructure and extend the maturity of debt obligations in line with 
forecasted cash flows. The Board, with recommendation from the Audit Committee, 
has a reasonable expectation that the Company has adequate resources to 
continue in operational existence for the foreseeable future. 
 
In reaching its conclusion, the Board has considered the risks that could 
impact the Company's liquidity over the period from 10 November 2021 to 10 
November 2022 (the "going concern period") being 12 months from the signing of 
the Interim Financial Statements. 
 
As part of their assessment, the Audit Committee highlighted the following key 
consideration: 
 
Whether if required, the Company can implement an alternative debt 
restructuring plan that will enable the Company to repay its debt obligations, 
including the redemption of its ZDP shares, over an extended timeframe. The 
extent of the debt restructuring will be dependent on the cash amounts 
generated through realisations of its underlying investments throughout the 
going concern period. 
 
Recent events impacting liquidity 
 
·      The repayment of $33.3 million of the Senior Debt Facility following a 
material realisation and the lenders also agreed to the extension of the 
maturity date of the Senior Debt Facility to 12 June 2022. 
 
·      The issue of Loan Notes totalling $31.5 million repayable 11 September 
2022. 
 
·      The redemption of the Company's CULS (£38.8 million) on 30 July 2021. 
 
·      Post period end, the Company agreed with its existing senior lenders to 
borrow a further amount of $16.0 million under its Senior Debt Facility. 
Following the increase, the total amount outstanding under the Senior Debt 
Facility is approx. $52.6 million. 
 
Update on material liabilities due for settlement 
 
The below table shows the Company's net debt position at 31 October 2021 versus 
the prior year end and interim reporting date: 
                                                     31.10.2021    28.2.2021  31.8.2020 
 
                                                          $'000        $'000      $'000 
 
ZDP Shares - maturity date 1 October 2022 - dollar       78,951       80,527     76,610 
equivalent of £57.6 million¹ 
 
Loan Notes - maturity date 11 September 2022²            31,673            -          - 
 
Senior Debt Facility - extended maturity date 12         52,563       68,694    150,355 
June 2022² 
 
CULS - maturity date 30 July 2021 - redemption                -       54,332     52,033 
amount of £38.8 million¹ 
 
Total debt                                              163,187      203,553    278,998 
 
Cash and cash equivalents held                           62,553       63,178     39,051 
 
Net debt position                                       100,634      140,375    239,947 
 
¹ZDP and CULS maturity dollar amount translated using the relevant period end 
exchange rate. 
 
²Includes accrued interest 
 
Realisations 
 
The below table shows the Company's realisations over the twelve month period 
ending 31 August 2021: 
 
Asset                                                   Portfolio              Proceeds 
 
                                                                           ($ millions) 
 
Secondary Sale                                          US                         87.7 
 
Salter Labs (includes $4.4 million from refinancing in  US                         45.5 
September 2020) 
 
Greenpoint                                              Real estate                13.6 
 
George Industries                                       US                          9.5 
 
Orangewood Fund                                         US                          6.2 
 
Fund III distributions                                  European                    0.7 
 
Total                                                                             163.2 
 
The Company continues to work on the realisation of various investments within 
a timeframe that will enable the Company to maximise the value of its 
investment portfolio. If it becomes apparent during quarter 1 of 2022 that 
realisation amounts, over the going concern period, will be insufficient to 
meet the Company's debt obligations, then the Company will look at 
opportunities to restructure its debt, to enable returns to be maximised and 
for debt obligations to be met over an extended timeframe. 
 
The Board continues to consider the levels of realisation proceeds historically 
generated by the Company's micro-cap portfolios as well as the accuracy of 
previous forecasts whilst concluding on the predicted accuracy of forecasts 
presented. 
 
The Board acknowledges that the new maturity date of the Senior Debt Facility 
and the Loan Notes still fall within the going concern period and therefore the 
Company will still need to generate sufficient realisation proceeds, within the 
period, to repay its debt obligations or make alternative debt arrangements 
with lenders post relevant maturity dates. 
 
Considering the Company's projected cash position, ongoing operating costs, and 
the anticipated further investment required to support the Company's portfolio, 
the Board anticipates further proceeds of approx. $150 million are required to 
enable the Company to settle its debts as they fall due. 
 
Going Concern Conclusion 
 
After careful consideration and based on an assessment of future realisations, 
the Board is satisfied, as of today's date, that it is appropriate to adopt the 
going concern basis in preparing the financial statements and they have a 
reasonable expectation that the Company will continue in existence as a going 
concern for the period to 10 November 2022. 
 
However, the Board has determined that there is a material uncertainty 
surrounding the Company's ability to generate sufficient liquidity to repay its 
Senior Debt Facility (due 12 June 2022), Loan Notes (due 11 September 2022) and 
repay its ZDP shares (due 1 October 2022) which casts significant doubt over 
the ability of the Company to continue as a Going Concern, based on the 
following key consideration: 
 
Whether if required, the Company can implement an alternative debt 
restructuring plan that will enable the Company to repay its debt obligations, 
including the redemption of its ZDP shares, over an extended timeframe. The 
extent of the debt restructuring will be dependent on the cash amounts 
generated through realisations of its underlying investments throughout the 
going concern period. 
 
The financial statements do not include any adjustments that might result from 
the outcome of these uncertainties. 
 
4.   Segment Information 
 
The Investment Manager is responsible for allocating resources available to the 
Company in accordance with the overall business strategies as set out in the 
Investment Guidelines of the Company. The Company is organised into the 
following segments: 
 
·      Portfolio of US Micro-cap investments 
 
·      Portfolio of European Micro-cap investments 
 
·      Portfolio of Real Estate investments 
 
·      Portfolio of Other Investments - (not falling into above categories) 
 
Investments in treasury bills are not considered as part of the investment 
strategy and are therefore excluded from this segmental analysis. 
 
The investment objective of each segment is to achieve consistent medium-term 
returns from the investments in each segment while safeguarding capital by 
investing in a diversified portfolio. 
 
Segmental operating profit/(loss) 
 
For the period from 1 March 2021 to 31 August 2021 
 
                                         US    European      Real         Other 
                                  Micro-cap   Micro-cap    Estate   Investments 
 
                                                                                     Total 
 
                                   US$ '000    US$ '000       US$      US$ '000   US$ '000 
                                                             '000 
 
Interest revenue                      7,479       1,405         -             -      8,884 
 
Dividend revenue                        234           -         -             -        234 
 
Total segmental revenue               7,713       1,405         -             -      9,118 
 
Net (loss)/gain on investments at     (570)         349   (4,588)             -    (4,809) 
FVTPL 
 
Expected credit losses                    -     (1,405)         -             -    (1,405) 
 
Investment Adviser's base           (2,156)       (899)     (167)         (174)    (3,396) 
fee 
 
Total segmental operating             4,987       (550)   (4,755)         (174)      (492) 
profit/(loss) 
 
For the period from 1 March 2020 to 31 August 2020 
 
                                          US   European       Real         Other      Total 
                                   Micro-Cap  Micro-Cap     Estate   Investments 
 
                                    US$ '000   US$ '000   US$ '000      US$ '000   US$ '000 
 
Interest                              11,443      1,245          -             -     12,688 
revenue 
 
Total segmental revenue               11,443      1,245          -             -     12,688 
 
Net (loss)/gain on investments at    (8,074)      7,034  (113,049)             - 
FVTPL                                                                             (114,089) 
 
Expected credit losses                     -      (560)          -             -      (560) 
 
Realisations from investments held       801          -          -             -        801 
in Escrow 
 
Investment Adviser's base            (3,087)      (785)      (968)         (175)    (5,015) 
fee 
 
Total segmental operating profit       1,083      6,934  (114,017)         (175) 
/(loss)                                                                           (106,175) 
 
Certain income and expenditure is not considered part of the performance of an 
individual segment. This includes net foreign exchange gains, interest on cash, 
finance costs, management fees, custodian and administration fees, directors' 
fees and other general expenses. 
 
The following table provides a reconciliation between total segmental operating 
loss and operating loss: 
 
                                                                            Period      Period 
                                                                             ended       ended 
 
                                                                         31.8.2021   31.8.2020 
 
                                                                          US$ '000    US$ '000 
 
Total segmental operating loss                                               (492)   (106,175) 
 
Loss on financial liabilities at fair value through profit                 (1,869)     (2,836) 
or loss 
 
Net foreign exchange loss                                                    (202)     (2,035) 
 
Bank and deposit interest                                                       75         124 
 
Expenses not attributable to segments                                      (2,299)     (2,301) 
 
Fees payable to investment adviser based on non-segmental assets             (492)       (344) 
 
Interest on US treasury bills                                                    1           9 
 
Operating loss                                                             (5,278)   (113,558) 
 
The following table provides a reconciliation between total segmental revenue 
and Company revenue: 
 
                                                                       Period       Period 
                                                                        ended        ended 
 
                                                                    31.8.2021    31.8.2020 
 
                                                                     US$ '000     US$ '000 
 
Total segmental revenue                                                 9,118       12,688 
 
Non-segmental revenue 
 
Bank and deposit interest                                                  75          124 
 
Interest on US treasury bills                                               1            9 
 
Total revenue                                                           9,194       12,821 
 
Segmental Net Assets 
 
At 31 August 2021 
 
                                        US    European        Real         Other 
 
                                 Micro-cap   Micro-cap      Estate   Investments       Total 
 
                                  US$ '000    US$ '000    US$ '000      US$ '000    US$ '000 
 
  Segmental assets 
 
  Investments at FVTPL             254,356      86,661      18,788        23,147     382,952 
 
  Loans at amortised cost                -      32,884           -             -      32,884 
 
  Prepaid Investment Advisor           106          19           8             9         142 
  fees 
 
  Total segmental assets           254,462     119,564      18,796        23,156     415,978 
 
  Segmental liabilities 
 
  Payables and accrued expenses      (398)           -           -             -       (398) 
 
  Total segmental liabilities        (398)           -           -             -       (398) 
 
Total segmental net assets         254,064     119,564      18,796        23,156     415,580 
 
At 28 February 2021 
 
                                        US    European        Real         Other 
 
                                 Micro-cap   Micro-cap      Estate   Investments       Total 
 
                                  US$ '000    US$ '000    US$ '000      US$ '000    US$ '000 
 
  Segmental assets 
 
  Investments at FVTPL             299,339      83,968      23,376        23,147     429,830 
 
  Loans at amortised cost                -      33,813           -             -      33,813 
 
  Total segmental assets           299,339     117,781      23,376        23,147     463,643 
 
  Segmental liabilities 
 
  Payables and accrued expenses      (771)       (101)        (43)          (21)       (936) 
 
  Total segmental liabilities        (771)       (101)        (43)          (21)       (936) 
 
Total segmental net assets         298,568     117,680      23,333        23,126     462,707 
 
The following table provides a reconciliation between total segmental assets 
and total assets and total segmental liabilities and total liabilities: 
 
                                                                       31.8.2021   28.2.2021 
 
                                                                        US$ '000    US$ '000 
 
Total segmental assets                                                   415,978     463,643 
 
Non segmental assets 
 
Cash at bank                                                              41,187      59,784 
 
Treasury Bills                                                             3,395       3,394 
 
Other receivables                                                            247          22 
 
Total assets                                                             460,807     526,843 
 
Total segmental                                                            (398)       (936) 
liabilities 
 
Non segmental liabilities 
 
Zero Dividend Preference shares                                         (75,014)    (74,303) 
 
Loan notes                                                              (31,669)           - 
 
Senior debt facility                                                    (36,629)    (68,694) 
 
Convertible Unsecured Loan Stock                                               -    (52,430) 
 
Other payables                                                             (846)       (921) 
 
Total liabilities                                                      (144,556)   (197,284) 
 
Total net assets                                                         316,251     329,559 
 
Other receivables (other than the Investment Adviser fee prepayment) are not 
considered to be part of individual segment assets. Certain liabilities are not 
considered to be part of the net assets of an individual segment. These include 
custodian and administration fees payable, directors' fees payable and other 
payables and accrued expenses. 
 
5.   Fair Value of Financial Instruments 
 
The Company classifies fair value measurements of its financial instruments at 
FVTPL using a fair value hierarchy that reflects the significance of the inputs 
used in making the measurements. The financial instruments valued at FVTPL are 
analysed in a fair value hierarchy based on the following levels: 
 
Level 1 
 
Quoted prices (unadjusted) in active markets for identical assets or 
liabilities. 
 
Level 2 
 
Those involving inputs other than quoted prices included within Level 1 that 
are observable for the asset or liability, either directly (that is, as prices) 
or indirectly (that is, derived from prices). For example, investments which 
are valued based on quotes from brokers (intermediary market participants) are 
generally indicative of Level 2 when the quotes are executable and do not 
contain any waiver notices indicating that they are not necessarily tradeable. 
Another example would be when assets/liabilities with quoted prices, that would 
normally meet the criteria of Level 1, do not meet the definition of being 
traded on an active market. 
 
Level 3 
 
Those involving inputs for the asset or liability that are not based on 
observable market data (that is, unobservable inputs). Investments in JZCP's 
portfolio valued using unobservable inputs such as multiples, capitalisation 
rates, discount rates fall within Level 3. 
 
Differentiating between Level 2 and Level 3 fair value measurements i.e., 
assessing whether inputs are observable and whether the unobservable inputs are 
significant, may require judgement and a careful analysis of the inputs used to 
measure fair value including consideration of factors specific to the asset or 
liability. 
 
The following table shows financial instruments recognised at fair value, 
analysed between those whose fair value is based on: 
 
Financial assets at 31 August 2021 
 
                                                  Level 1   Level 2   Level 3     Total 
 
                                                 US$ '000       US$       US$       US$ 
                                                               '000      '000      '000 
 
US micro-cap                                            -         -   254,356   254,356 
 
European micro-cap                                      -         -    86,661    86,661 
 
Real estate                                             -         -    18,788    18,788 
 
Other investments                                       -         -    23,147    23,147 
 
Listed investments                                  3,395         -         -     3,395 
 
                                                    3,395         -   382,952   386,347 
 
Financial assets at 28 February 2021 
 
                                                  Level 1   Level 2   Level 3     Total 
 
                                                 US$ '000       US$       US$       US$ 
                                                               '000      '000      '000 
 
US micro-cap                                            -         -   299,339   299,339 
 
European micro-cap                                      -         -    83,968    83,968 
 
Real estate                                             -         -    23,376    23,376 
 
Other investments                                       -         -    23,147    23,147 
 
Listed investments                                  3,394         -         -     3,394 
 
                                                    3,394         -   429,830   433,224 
 
Valuation techniques 
 
The same valuation methodology and process was deployed as for the year ended 
28 February 2021. 
 
Financial liabilities designated at fair value through profit or loss at 
inception 
 
Financial liabilities at 31 August 2021              Level 1  Level 2   Level 3    Total 
 
                                                    US$ '000 US$ '000  US$ '000 US$ '000 
 
Convertible Unsecured Loan Stock - Redeemed                -        -         -        - 
30.7.2021 
 
                                                           -        -         -        - 
 
 
 
Financial liabilities at 28 February 2021            Level 1  Level 2   Level 3    Total 
 
                                                    US$ '000 US$ '000  US$ '000 US$ '000 
 
Convertible Unsecured Loan Stock                           -   52,430         -   52,430 
 
                                                           -   52,430         -   52,430 
 
Market transactions for the CULS did not take place with sufficient frequency 
and volume to provide adequate pricing information on an ongoing basis and 
therefore it was considered the CULS were not traded in an active market and 
were therefore categorised at Level 2 as defined by IFRS. 
 
Quantitative information of significant unobservable inputs and sensitivity 
analysis to significant changes in unobservable inputs within Level 3 hierarchy 
 
The significant unobservable inputs used in fair value measurement categorised 
within Level 3 of the fair value hierarchy together with a quantitative 
sensitivity as at 31 August 2021 and 28 February 2021 are shown below: 
 
                  Value       Valuation   Unobservable     Range Sensitivity   Effect on Fair 
              31.8.2021                                (weighted                        Value 
 
                US$'000       Technique          input  average)        used          US$'000 
 
US micro-cap    254,356 EBITDA Multiple Average EBITDA    7.0x -     -0.5x /  (22,387) 22,141 
investments                                Multiple of     13.5x       +0.5x 
                                                 Peers    (9.0x) 
 
                                           Discount to 10% - 30%   +5% / -5%  (31,506) 30,503 
                                               Average     (17%) 
                                              Multiple 
 
European        119,545 EBITDA Multiple Average EBITDA    6.6x -     -0.5x /   (4,813)  4,813 
micro-cap                                  Multiple of     13.9x       +0.5x 
investments                                      Peers   (10.4x) 
 
                                           Discount to 12% - 57%   +5% / -5%   (4,507)  4,507 
                                               Average     (22%) 
                                              Multiple 
 
Real             18,788       Cap Rate/ Capitalisation   5.25% -     +50bps/   (4,822)  5,885 
estate1,2               Income Approach           Rate     6.25%      -50bps 
                                                          (5.9%) 
 
Other            21,938         Forward        Revenue      $8.3   -10%/+10%   (2,194)  1,558 
investments3                    looking       Multiple   million 
                                Revenue                     5.3x   -10%/+10%   (2,194)  1,558 
                               Approach 
 
 
                  Value       Valuation   Unobservable     Range Sensitivity   Effect on Fair 
              28.2.2021                                (weighted                        Value 
 
                US$'000       Technique          input  average)        used          US$'000 
 
US micro-cap    299,339 EBITDA Multiple Average EBITDA    7.5% - -0.5x/+0.5x (26,888)   22,859 
investments                                Multiple of     13.5% 
                                                 Peers    (9.6x)     +5%/-5% (36,420)   35,604 
                                           Discount to 10% - 30% 
                                               Average     (17%) 
                                              Multiple 
 
European         80,689 EBITDA Multiple Average EBITDA    7.4x - -0.5x/+0.5x  (4,615)    4,597 
micro-cap                                  Multiple of     14.0x 
investments                                      Peers   (10.0x) 
 
                                           Discount to 
                                               Average 
                                              Multiple 
 
                                                       11% - 69%     +5%/-5%  (4,225)    4,205 
Real             23,376 Cap Rate/Income                    (29%) 
estate1,2                      Approach 
 
                                        Capitalisation   5.25% -     +50bps/  (7,925)    9,834 
                                                  Rate     6.25%      -50bps 
                                                         (5.94%) 
 
Other            21,938    AUM Approach            AUM    $3.8Bn   -10%/+10%  (4,989)    4,989 
investments3 
 
                                          % Applied to      2.3%   -10%/+10%  (2,194)    2,194 
                                                   AUM 
 
 
¹The Fair Value of JZCP's investment in financial interests in Real Estate is 
measured as JZCP's percentage interest in the value of the underlying 
properties. 
 
²Sensitivity is applied to the property value and then the debt associated to 
the property is deducted before the impact to JZCP's equity value is 
calculated. Due to gearing levels in the property structures, an increase in 
the sensitivity of measurement metrics at property level will result in a 
significantly greater impact at JZCP's equity level. 
 
3 JZCP's investment in Spruceview. 
 
The following table shows a reconciliation of all movements in the fair value 
of financial instruments categorised within Level 3 between the beginning and 
the end of the reporting period/year. 
 
Period ended 31 August 2021 
 
                                            US   European      Real       Other 
 
                                     Micro-Cap  Micro-Cap    Estate Investments    Total 
 
                                      US$ '000   US$ '000  US$ '000    US$ '000 US$ '000 
 
At 1 March 2021                        299,339     83,968    23,376      23,147  429,830 
 
Investments in year including            4,898      3,044         -           -    7,942 
capital calls 
 
Payment in kind ("PIK")                  3,163          -         -           -    3,163 
 
Proceeds from investments             (56,790)      (700)         -           - 
realised                                                                        (57,490) 
 
Net (loss)/gain on investments           (570)        349   (4,588)           -  (4,809) 
 
Movement in accrued interest             4,316          -         -           -    4,316 
 
At 31 August 2021                      254,356     86,661    18,788      23,147  382,952 
 
Year ended 28 February 2021 
 
                                              US   European      Real       Other 
 
                                       Micro-Cap  Micro-Cap    Estate Investments     Total 
 
                                        US$ '000   US$ '000  US$ '000    US$ '000  US$ '000 
 
At 1 March 2020                          404,880     71,619   158,712      22,603   657,814 
 
Investments in year including              3,629      9,858     2,639       1,840    17,966 
capital calls 
 
Payment in kind ("PIK")                   20,027          -         -           -    20,027 
 
Proceeds from investments realised     (114,170)    (9,328)  (13,555)     (1,283) (138,336) 
 
Net (loss)/gain on investments          (13,772)     11,819                  (13) (126,386) 
                                                            (124,420) 
 
Movement in accrued interest             (1,255)          -         -           -   (1,255) 
 
At 28 February 2021                      299,339     83,968    23,376      23,147   429,830 
 
Fair value of Zero Dividend Preference ("ZDP") shares 
 
The fair value of the ZDP shares is deemed to be their quoted market price. As 
at 31 August 2021, the ask price for the ZDP (2022) shares was £4.40 (28 
February 2021: £3.80 per share) and the total fair value of the ZDP shares was 
$72,107,000 (28 February 2021: $63,263,000) which is $2,907,000 lower (28 
February 2021: $11,040,000 lower) than the liability recorded in the Statement 
of Financial Position. 
 
ZDP shares are recorded at amortised cost and would fall in to the Level 2 
hierarchy if valued at FVTPL. 
 
6.   Net Loss on Investments at Fair Value Through Profit or Loss 
 
                                                                               Period       Period 
                                                                                ended        ended 
 
                                                                            31.8.2021    31.8.2020 
 
                                                                             US$ '000     US$ '000 
 
Loss on investments held in investment portfolio at period end 
 
Net movement in period end unrealised gain position                            18,315   (111,517) 
 
Unrealised net (loss)/gain in prior periods now                              (24,765)       9,128 
realised 
 
Net unrealised loss in the period                                             (6,450) 
                                                                                        (102,389) 
 
Net gain/(loss) on investments realised in the period 
 
Proceeds from investments realised                                             57,490       6,411 
 
Cost of investments realised                                                 (80,614)     (8,983) 
 
Unrealised net loss/(gain) in prior periods now                                24,765     (9,128) 
realised 
 
Total net gain/(loss) in the period on investments realised in                  1,641    (11,700) 
the period 
 
Net loss on investments in the period                                         (4,809)   (114,089) 
 
 
7.   Expected Credit Losses 
 
Expected Credit Losses ("ECLs") are recognised in three stages. Stage one being 
for credit exposures for which there has not been a significant increase in 
credit risk since initial recognition, ECLs are provided for credit losses that 
result from default events that are possible within the next 12-months (a 
12-month ECL). Stage two being for those credit exposures for which there has 
been a significant increase in credit risk since initial recognition, a loss 
allowance is required for credit losses expected over the remaining life of the 
exposure, irrespective of the timing of the default (a lifetime ECL). Stage 
three being credit exposures which are considered credit-impaired, interest 
revenue is calculated based on the amortised cost (i.e. the gross carrying 
amount less the loss allowance). Financial assets in this stage will generally 
be assessed individually. Lifetime expected credit losses are recognised on 
these financial assets. 
 
                                                                 Period ended Period ended 
 
                                                                    31.8.2021    31.8.2020 
 
                                                                     US$ '000     US$ '000 
 
Impairment on loans classified as Stage 1                                 987          560 
 
Impairment on loans classified as                                         418            - 
Stage 2 
 
Impairment on loans classified as                                           -            - 
Stage 3 
 
Total impairment on                                                     1,405          560 
loans during the 
period 
 
8.   Investment Income 
 
                                                                 Period ended Period ended 
 
                                                                    31.8.2021    31.8.2020 
 
                                                                     US$ '000     US$ '000 
 
Interest calculated using the effective interest rate                   1,405        1,245 
method 
 
Other interest and similar income                                       7,714       11,452 
 
                                                                        9,119       12,697 
 
Income for the period ended 31 August 2021 
 
                          Preferred       Loan note                      Other 
                                          Interest 
 
                           Interest     PIK      Cash     Dividend    Interest       Total 
 
                           US$ '000       US$       US$   US$ '000    US$ '000    US$ '000 
                                         '000      '000 
 
US micro-cap                  7,479         -         -        234           -       7,713 
 
European micro-cap                -     1,405         -          -           -       1,405 
 
Listed investments                -         -         -          -           1           1 
 
                              7,479     1,405         -        234           1       9,119 
 
Income for the period ended 31 August 2020 
 
                          Preferred       Loan note                      Other 
                                          Interest 
 
Portfolio                  Interest     PIK      Cash     Dividend    Interest       Total 
 
                           US$ '000       US$       US$   US$ '000    US$ '000    US$ '000 
                                         '000      '000 
 
US micro-cap                 11,035       154       254          -           -      11,443 
 
European micro-cap                -     1,245         -          -           -       1,245 
 
Listed investments                -         -         -          -           9           9 
 
                             11,035     1,399       254          -           9      12,697 
 
9.   Finance Costs 
 
                                                                     Period        Period 
                                                                      ended         ended 
 
                                                                  31.8.2021     31.8.2020 
 
                                                                   US$ '000      US$ '000 
 
Interest expense calculated using the effective interest 
method 
 
ZDP shares (Note 12)                                                  1,892         1,636 
 
Loan Notes (Note 13)                                                    169             - 
 
Senior Debt Facility (Note 14)                                        3,584         6,109 
 
                                                                      5,645         7,745 
 
Other interest and similar expense 
 
CULS interest paid1 (Note 15)                                         2,679         1,445 
 
                                                                      8,324         9,190 
 
10. Fees Payable to the Investment Adviser 
 
Investment Advisory and Performance fees 
 
The Company entered into the amended and restated investment advisory and 
management agreement with Jordan/Zalaznick Advisers, Inc. (the "Investment 
Adviser") on 23 December 2010 (the "Advisory Agreement"). 
 
Pursuant to the Advisory Agreement, the Investment Adviser is entitled to a 
base management fee and to an incentive fee. The base management fee is an 
amount equal to 1.5 per cent per annum of the average total assets under 
management of the Company less those assets identified by the Company as being 
excluded from the base management fee, under the terms of the agreement. The 
base management fee is payable quarterly in arrears; the agreement provides 
that payments in advance on account of the base management fee will be made. 
 
For the six-month period ended 31 August 2021, total investment advisory and 
management expenses, based on the average total assets of the Company, were 
included in the Statement of Comprehensive Income of $3,888,000 (period ended 
31 August 2020: $5,359,000). Of this amount, $191,000 was prepaid (28 February 
2021: $573,000 was due and payable) at the period end. 
 
During the year ended 29 February 2020, the Investment Adviser agreed to waive 
incentive fees payable by the Company relating to realised gains in the years 
ended February 2019 and 2020. No further incentive fees will be paid to the 
Investment Adviser until the Company and Investment Adviser have mutually 
agreed to reinstate such payments. 
 
11. Investments 
 
                                            Listed    Unlisted    Unlisted Carrying Value 
 
                                             FVTPL       FVTPL       Loans          Total 
 
                                         31.8.2021   31.8.2021   31.8.2021      31.8.2021 
 
                                          US$ '000    US$ '000    US$ '000       US$ '000 
 
Book cost at 1 March 2021                    3,393     543,740      74,651        621,784 
 
Investments in period including capital          -       7,942           -          7,942 
calls 
 
Payment in kind ("PIK")1                         -       3,163         633          3,796 
 
Proceeds from investments                        -    (57,490)           -       (57,490) 
realised 
 
Net realised loss                                -    (23,124)           -       (23,124) 
 
Realised impairment loss²                        -           -    (31,757)       (31,757) 
 
Realised currency loss²                          -           -     (2,674)        (2,674) 
 
Book cost at 31 August 2021                  3,393     474,231      40,853        518,477 
 
Unrealised investment and foreign                -    (98,119)     (3,364)      (101,483) 
exchange loss 
 
Impairment on loans at amortised                 -           -     (5,835)        (5,835) 
cost 
 
Accrued interest                                 2       6,840       1,230          8,072 
 
Carrying value at 31 August 2021             3,395     382,952      32,884        419,231 
 
1The cost of PIK investments is deemed to be interest not received in cash but 
settled by the issue of further securities when that interest has been 
recognised in the Statement of Comprehensive Income. 
 
2Realised impairment loss is due to the Company's direct loan in Ombuds 
(European micro-cap). The loss was recognised in prior periods and was included 
within the comparative number for Impairment on loans at amortised cost. 
 
                                             Listed    Unlisted   Unlisted      Carrying 
                                                                                   Value 
 
                                              FVTPL       FVTPL      Loans         Total 
 
                                          28.2.2021   28.2.2021  28.2.2021     28.2.2021 
 
                                           US$ '000    US$ '000   US$ '000      US$ '000 
 
Book cost at 1 March 2020                     3,385     970,184     71,939     1,045,508 
 
Investments in year including capital         6,787      58,931          -        65,718 
calls 
 
Payment in kind ("PIK")1                          -      20,027      2,712        22,739 
 
Proceeds from investments matured/          (6,790)   (179,301)          -     (186,091) 
realised 
 
Interest received on maturity                    11           -          -            11 
 
Net realised investment and foreign               -   (326,101)          -     (326,101) 
exchange loss 
 
Book cost at 28 February 2021                 3,393     543,740     74,651       621,784 
 
Unrealised investment and foreign                 -   (116,434)    (7,973)     (124,407) 
exchange loss 
 
Impairment on loans at amortised                  -           -   (33,323)      (33,323) 
cost² 
 
Accrued interest                                  1       2,524        458         2,983 
 
Carrying value at 28 February                 3,394     429,830     33,813       467,037 
2021 
 
1The cost of PIK investments is deemed to be interest not received in cash but 
settled by the issue of further securities when that interest has been 
recognised in the Statement of Comprehensive Income. 
 
2Includes unrealised impairment loss of the Company's direct loan in Ombuds 
(European micro-cap) which has been realised during the current interim period. 
 
Loans at amortised cost 
 
Interest on the loans accrues at the following rates: 
 
                         As at 31 August 2021                 As at 28 February 2021 
 
                   8%       10%       14%      Total      8%        10%       14%     Total 
 
Loans at         27,780    2,271     2,833    32,884    28,652     2,247     2,914   33,813 
amortised cost 
 
 
Maturity dates are as follows: 
 
                         As at 31 August 2021                 As at 28 February 2021 
 
                   0-6      7-12       1-2      Total      0-6      7-12      1-2     Total 
                  months   months     years              months    months    years 
 
                  $'000     $'000     $'000     $'000     $'000     $'000    $'000    $'000 
 
Loans at            -         -      32,884    32,884       -         -      33,813  33,813 
amortised cost 
 
 
12. Zero Dividend Preference ("ZDP") shares 
 
On 1 October 2015, the Company rolled over 11,907,720 existing ZDP (2016) 
shares into new ZDP shares with a 2022 maturity date. The new ZDP shares (ZDP 
2022) have a gross redemption yield of 4.75% and a total redemption value of £ 
57,597,000 (approximately $77,121,000 using the period end exchange rate). 
 
ZDP shares are designed to provide a pre-determined final capital entitlement 
which ranks behind the Company's creditors but in priority to the capital 
entitlements of the Ordinary shares. The ZDP shares carry no entitlement to 
income and the whole of their return will therefore take the form of capital. 
In certain circumstances, ZDP shares carry the right to vote at general 
meetings of the Company as detailed in the Company's Memorandum and Articles of 
Incorporation. Issue costs are deducted from the cost of the liability and 
allocated to the Statement of Comprehensive Income over the life of the ZDP 
shares. 
 
ZDP (2022) shares 
 
                                                                 31.8.2021      28.2.2021 
 
                                                                  US$ '000       US$ '000 
 
Amortised cost at 1 March                                           74,303         64,510 
 
Finance costs allocated to Statement of Comprehensive Income         1,892          3,441 
 
Unrealised currency (gain)/loss on translation                     (1,181)          6,352 
 
Amortised cost at period/year end                                   75,014         74,303 
 
Total number of ZDP shares in issue                             11,907,720     11,907,720 
 
13. Loan Notes 
 
During the period, the Company entered into a note purchase agreement with 
David Zalaznick and John (Jay) Jordan, the founders and principals of the 
Company's investment adviser, Jordan/Zalaznick Advisers, Inc. ("JZAI"), 
pursuant to which they have agreed to purchase directly or through their 
affiliates, subordinated, second lien loan notes totalling $31.5 million, with 
a maturity date of 11 September 2022 (the "Loan Notes"). 
 
The interest rate on the Loan Notes will be 6 per cent. per annum payable 
semi-annually on each of 31 March and 30 September of each year, commencing on 
the first such date to occur after the issuance of the Loan Notes. 
 
                                                                31.8.2021      28.2.2021 
 
                                                                 US$ '000       US$ '000 
 
Loan notes issued in period                                        31,500              - 
 
Finance costs charged to Statement of Comprehensive Income            169              - 
 
Amortised cost at period/year end                                  31,669              - 
 
14. Senior Debt Facility 
 
On 12 June 2015, JZCP entered into a Senior Secured Debt Facility agreement 
with Guggenheim Partners Limited (the "Original Lenders"). The original 
facility was structured as $80 million and ?18 million and increased by a 
further $50 million in April 2017. The original maturity date of the facility 
being on 12 June 2021 (6 year term). 
 
On 23 October 2020, the Company announced that it has agreed amended terms of 
the Senior Debt Facility. Under the terms of the Amended Senior Facility, $40 
million of the outstanding principal amount was assigned from the original 
lenders to clients and funds advised by Cohanzick Management, LLC and 
CrossingBridge Advisors, LLC (the "Replacement Lenders"). Subsequent to 
entering into the amended agreement and following investment realisations, the 
Company repaid a total of $82.9 million of the outstanding principal amount. 
 
On 23 February 2021, the Company announced that Guggenheim Partners Europe 
Limited had sold its remaining interest in the Company's senior debt facility 
(the "First Out Loan") to the Replacement Lenders. There were no further 
changes to the quantum or terms of the existing First Out Loan as a result of 
this transaction. 
 
On 14 May 2021, the Company entered into an amendment agreement with its senior 
lenders to further amend the terms of its senior debt facility which will, 
among other things, extend the maturity date of the senior debt facility by one 
year until 12 June 2022. The interest rate charges under the amended agreement 
for the First Out Loans will be amended from a rate of LIBOR¹ + 5.75 per cent. 
to a rate of LIBOR + 9.75 per cent. (with a 1 per cent. floor). The interest 
rate charges under the amended agreement for the Last Out Loans will be amended 
from a rate of LIBOR + 11 per cent. to a rate of LIBOR + 15 per cent. (with a 1 
per cent. floor), of which 4 per cent. shall be charged as payment-in-kind 
interest. 
 
The modified terms of the loan are not deemed to be substantially different 
from the original terms. Therefore, as per IFRS 9, the senior debt facility is 
accounted for as a continuation of the original facility rather than an 
extinguishment of the original facility and the recognition of a new facility. 
 
On 18 June 2021, the Company repaid a further $33.3 million of the outstanding 
principal amount following a material investment realisation. 
 
At 31 August 2021, investments and cash valued at $438,480,000² (28 February 
2021: $504,883,000) were held as collateral on the loan. A covenant on the loan 
states the fair value of the collateral must be 3.5.x the loan value. The 
Company is also required to hold a minimum cash balance of $15 million. At 31 
August 2021 and during the six-month interim period, the Company was in full 
compliance with covenant terms. 
 
¹There is an interest rate floor that stipulates LIBOR will not be lower than 
1%. In this agreement, the presence of the floor does not significantly alter 
the amortised cost of the instrument, therefore separation is not required and 
the loan is valued at amortised cost using the effective interest rate method. 
During the year the relevant 3 month LIBOR rates were below 1%. LIBOR 
regulators (including the UK Financial Conduct Authority and the US Commodity 
Futures Trading Commission) have announced a transition away from LIBOR, 
however it is expected that the 3 month USD LIBOR which is relevant to the 
Company will continue to be available until the end of June 2023. 
 
²Investments held as collateral exclude the Company's investment in Spruceview 
Capital. 
 
                                                                 31.8.2021     28.2.2021 
 
                                                                  US$ '000      US$ '000 
 
Amortised cost (US$ drawdown) - 1 March                             68,694       130,523 
 
Amortised cost (Euro drawdown) - 1 March                                 -        19,839 
 
Loan repayments                                                   (33,264)      (82,912) 
 
Finance costs charged to Statement of Comprehensive Income           3,584        11,797 
 
Interest and finance costs                                         (2,385)      (12,331) 
paid 
 
Unrealised currency gain on translation of Euro drawdown                 -         1,778 
 
Amortised cost at period/year end                                   36,629        68,694 
 
The carrying value of the loans approximates to fair value. 
 
On 7 October 2021, the Company announced that it had agreed with its existing 
senior lenders to borrow a further amount of $16.0 million under its Senior 
Debt Facility. Following the increase, the total amount outstanding under the 
Senior Debt Facility at 31 October 2021, is $52.6 million, of which $16.1 
million will be 'First Out loans' and $36.5 million will be 'Last Out loans'. 
 
15. Convertible Subordinated Unsecured Loan Stock ("CULS") 
 
On 30 July 2021, JZCP redeemed 3,884,279 £10 CULS and converted on request, 
1,835 £10 CULS into 3,039 Ordinary Shares at the agreed conversion price. 
 
JZCP issued £38,861,140 6% CULS on 30 July 2014. The holders of the CULS had 
the option to convert the whole or part (being an integral multiple of £10 in 
nominal amount) of their CULS into Ordinary Shares at the agreed conversion 
price of £6.0373 per Ordinary Share, which was subject to adjustment to deal 
with certain events which would otherwise dilute the conversion of the CULS. 
 
CULS bore interest on their nominal amount at the rate of 6.00 per cent. per 
annum, payable semi-annually in arrears. During the six-month period ended 31 
August 2021: $2,679,000 (31 August 2020: $1,445,000) of interest was paid to 
holders of CULS and $1,336,000 (31 August 2020: $1,445,000) is shown as a 
finance cost in the Statement of Comprehensive Income. 
 
In accordance with IFRS, the Company has calculated the movement in fair value 
due to the change in the credit risk of the CULS which is allocated as Other 
Comprehensive Income in the Statement of Comprehensive Income. The loss on 
financial liabilities at fair value through profit or loss comprises the 
movement in the fair value attributable to the change in the benchmark interest 
rate and the movement attributable to foreign exchange gain/loss on 
translation. 
 
                                                                   31.8.2021     28.2.2021 
 
                                                                    US$ '000      US$ '000 
 
Fair Value of CULS at 1 March                                         52,430        49,886 
 
Interest expense                                                       1,336         2,953 
 
Coupon paid                                                          (2,679)       (2,953) 
 
Unrealised movement in value of CULS due to change in Company's        1,074       (1,074) 
Credit Risk 
 
Unrealised movement in the fair value of CULS allocated to change      2,170         (912) 
in observed (benchmark) interest rate 
 
Unrealised currency (gain)/loss on translation during the period       (301)         4,530 
/year 
 
Loss to the Company on movement in the fair value of                   1,869         3,618 
CULS 
 
Redemption of CULS                                                  (54,005)             - 
 
Conversion of CULS into Ordinary Shares                                 (25)             - 
 
Fair Value of CULS based on offer price                                    -        52,430 
 
16. Other Payables 
 
                                                                     31.8.2021   28.2.2021 
 
                                                                      US$ '000    US$ '000 
 
Provision for tax on dividends received not                                398         398 
withheld at source 
 
Audit fees                                                                 292         363 
 
Legal fees provision                                                       250         250 
 
Directors' remuneration                                                     47          48 
 
Other expenses                                                             257         225 
 
                                                                         1,244       1,284 
 
17. Ordinary shares - Issued Capital 
 
                                                                  31.8.2021    28.2.2021 
 
                                                                  Number of    Number of 
                                                                     shares       shares 
 
Balance at 1 March                                               77,474,175   77,474,175 
 
Ordinary shares issued during period                                  3,039            - 
/year 
 
Total Ordinary shares in                                         77,477,214   77,474,175 
issue 
 
The Company's shares trade on the London Stock Exchange's Specialist Fund 
Segment. 
 
On 2 August 2021, the Company issued 3,039 Ordinary shares resulting from the 
conversion of 1,835 CULS. The conversion price was £6.0373 per Ordinary Share, 
resulting in a credit to the Share capital account of £18k ($25k). 
 
18. Commitments 
 
At 31 August 2021 and 28 February 2021, JZCP had the following financial 
commitments outstanding in relation to fund investments: 
 
                                                     Expected date   31.8.2021   28.2.2021 
 
                                                           of Call    US$ '000    US$ '000 
 
JZI Fund III GP, L.P. ?17,660,911 (28.2.2021: ?       over 3 years      20,848      23,825 
19,628,404) 
 
Spruceview Capital Partners,                           over 1 year         900         900 
LLC1 
 
Orangewood Partners II-A LP2                          see footnote           -       6,932 
 
Igloo Products Corp                                                          -         240 
 
                                                                        21,748      31,897 
 
1As approved by a shareholder vote on 12 August 2020, JZCP has the ability to 
make up to approximately $4.1 million in further commitments to Spruceview, 
above the $0.9 million unfunded commitments as at 31 August 2021. 
 
2During the period, the Company received shareholder approval for Jay Jordan 
and David Zalaznick to relieve the Company of all of its remaining commitments 
to the Orangewood Fund being $12.35 million, of which approximately $3 million 
of this commitment was "funded" and $9.35 million "unfunded" (following the 
Orangewood Fund's final close in April 2021 which resulted in a reallocation of 
unfunded commitments). 
 
19. Related Party Transactions 
 
JZAI is a US based company founded by David Zalaznick and John ("Jay") Jordan 
II, that provides advisory services to the Company in exchange for management 
fees, paid quarterly. Fees paid by the Company to the Investment Adviser are 
detailed in Note 10. JZAI and various affiliates provide services to certain 
JZCP portfolio companies and may receive fees for providing these services 
pursuant to the Advisory Agreement. 
 
JZCP invests in European micro-cap companies through JZI Fund III, L.P. ("Fund 
III"). Previously investments were made via the EuroMicrocap Fund 2010, L.P. 
("EMC 2010"). Fund III and EMC 2010 are managed by an affiliate of JZAI. At 31 
August 2021, JZCP's investment in Fund III was valued at $83.4 million (28 
February 2021: $80.7 million). JZCP's investment in EMC 2010 was valued at $3.3 
million (28 February 2021: $3.3 million). 
 
JZCP has invested in Spruceview Capital Partners, LLC on a 50:50 basis with Jay 
Jordan and David Zalaznick (or their respective affiliates). The total amount 
committed by JZCP to this investment at 31 August 2021, was $33.5 million with 
$0.9 million of this amount remaining unfunded and outstanding. As approved by 
a shareholder vote on 12 August 2020, JZCP has the ability to make up to 
approximately $4.1 million in further commitments to Spruceview, above the 
$33.5 million committed as of 31 August 2021. Should this approved capital be 
committed to Spruceview, it would be committed on the same 50:50 basis with Jay 
Jordan and David Zalaznick (or their respective affiliates). 
 
During the year ended 28 February 2021, the Company announced that it had 
agreed and received shareholder approval to sell its interests in certain US 
microcap portfolio companies (the "Secondary Sale") to a secondary fund led by 
Hamilton Lane Advisors, L.L.C. The Secondary Sale was structured as a sale and 
contribution to a newly formed fund, JZHL Secondary Fund LP, managed by an 
affiliate of JZAI. At 31 August 2021, JZCP's investment in Fund III was valued 
at $80.8 million (28 February 2021: $72.2 million). 
 
JZCP has co-invested with Fund A, Fund A Parallel I, II and III Limited 
Partnerships in a number of US micro-cap buyouts. These Limited Partnerships 
are managed by an affiliate of JZAI. JZCP invested in a ratio of 82%/18% with 
the Fund A entities. At 31 August 2021, these co-investments, with Fund A, were 
in the following portfolio companies: Igloo, Industrial Services Solutions, New 
Vitality, Testing Services Holdings, Tierpoint and Vitalyst. JZCP's investments 
in Testing Services Holdings and Tierpoint have subsequently been transferred 
to JZHL Secondary Fund LP (mentioned above). 
 
During the period, following shareholder approval, JZAI Founders Jay Jordan and 
David Zalaznick relieved the Company of $12.35 million of its remaining 
commitments to the Orangewood Fund (approximately $3 million of this commitment 
being "funded" and $9.35 million "unfunded"). 
 
During the period, the Company entered into a note purchase agreement with 
David Zalaznick and Jay Jordan, pursuant to which they have purchased directly 
or through their affiliates, subordinated, second lien loan notes in the amount 
of $31.5 million, with an interest rate of 6 per cent. per annum and maturing 
on 11 September 2022 (the "Loan Notes"). The issuance of the Loan Notes was 
subject to a number of conditions, including shareholder approval. 
 
Total Directors' remuneration for the six-month period ended 31 August 2021 was 
$145,000 (31 August 2020: $150,000). During the period, the Company was 
notified that Sharon Parr acquired 10,000 of the Company's Ordinary shares and 
also Ashley Paxton acquired 12,250 Ordinary shares and 4,250 Zero Dividend 
Preference shares. 
 
20. Basic and Diluted Loss per Share 
 
Basic loss per share is calculated by dividing the loss for the period by the 
weighted average number of Ordinary shares outstanding during the period. 
 
For the period ended 31 August 2021, the weighted average number of Ordinary 
shares outstanding during the period was 77,474,670 (31 August 2020: 
77,474,175). 
 
The diluted loss per share is calculated by considering adjustments required to 
the loss and weighted average number of shares for the effects of potential 
dilutive Ordinary shares. Following the redemption of the Company's CULS during 
the period, there are no longer any potential dilutive events to the Ordinary 
shares. 
 
The comparative diluted earnings per share considered the impact of adjusting 
the weighted average of the number of Ordinary shares for the conversion of the 
CULS ("If-converted method"). Conversion was assumed even though at 31 August 
2020 the exercise price of the CULS was higher than the market price of the 
Company's Ordinary shares and are therefore deemed 'out of the money'. Earnings 
were adjusted to remove the fair value loss recorded of $2,836,000 and finance 
cost attributable to CULS $1,445,000. For the period ended 31 August 2020, the 
potential conversion of the CULS would have been anti-dilutive to the total 
loss per share, therefore the diluted loss per share is presented as per the 
basic loss per share calculation. 
 
21. Contingent Assets 
 
Amounts held in escrow accounts 
 
When investments have been disposed of by the Company, proceeds may reflect 
contractual terms requiring that a percentage is held in an escrow account 
pending resolution of any indemnifiable claims that may arise. 
 
At 31 August 2021 and 28 February 2021, the Company has assessed that the 
likelihood of the recovery of these escrow accounts cannot be determined and 
has therefore disclosed the escrow accounts as a contingent asset. 
 
As at 31 August 2021 and 28 February 2021, the Company had the following 
contingent assets held in escrow accounts which had not been recognised as 
assets of the Company: 
 
                                                                     Amount in Escrow 
 
                                                                   31.8.2021   28.2.2021 
 
                                                                     US$'000     US$'000 
 
Triwater Holdings                                                        309         309 
 
Xpress Logistics (AKA Priority                                            19          19 
Express) 
 
                                                                         328         328 
 
During the period ended 31 August 2021, proceeds of $nil (31 August 2020: 
$801,000) were realised and recorded in the Statement of Comprehensive Income. 
 
22. Subsequent Events 
 
These Interim Financial Statements were approved by the Board on 10 November 
2021. Events subsequent to the period end 31 August 2021 have been evaluated 
until this date. 
 
On 7 October 2021, the Company announced that it had agreed with its existing 
senior lenders to borrow a further amount of $16.0 million under its Senior 
Debt Facility. Following the increase, the total amount outstanding under the 
Senior Debt Facility as at 31 October 2021 is approx. $52.6 million (including 
accrued interest). 
 
Post period-end, the Company received $3.7 million from the realisation of its 
portfolio company Igloo. The proceeds represent an approx. $3.4 million write 
up on the $0.3 million valuation at period end. The Directors have assessed 
that this is a non-adjusting post balance sheet event. 
 
Post period-end, the Company received a $2.2 million distribution from 
EuroMicrocap Fund 2010, L.P. ("EMC 2010"), relating to deferred income from the 
realisation, in 2017, of EMC 2010's investment in Factor Energia. The Company 
continues to hold an interest in Factor Energia through its investment in JZI 
Fund III. 
 
Company Advisers 
 
Investment Adviser 
The Investment Adviser to JZ Capital Partners Limited ("JZCP") is Jordan/ 
Zalaznick Advisers, Inc., ("JZAI") a company beneficially owned by John (Jay) W 
Jordan II and David W Zalaznick. The company offers investment advice to the 
Board of JZCP. JZAI has offices in New York and Chicago. 
 
Jordan/Zalaznick Advisers, Inc. 
9 West, 57th Street 
New York NY 10019 
 
Registered Office 
PO Box 255 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey GY1 3QL 
 
JZ Capital Partners Limited is registered in Guernsey Number 48761 
 
Administrator, Registrar and Secretary 
Northern Trust International Fund Administration 
Services (Guernsey) Limited 
PO Box 255 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey GY1 3QL 
 
UK Transfer and Paying Agent 
Equiniti Limited 
Aspect House 
Spencer Road 
Lancing 
West Sussex BN99 6DA 
 
US Banker 
HSBC Bank USA NA 
452 Fifth Avenue 
New York NY 10018 
(Also provides custodian services to JZ Capital Partners 
Limited under the terms of a Custody Agreement). 
 
Guernsey Banker 
Northern Trust (Guernsey) Limited 
PO Box 71 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey GY1 3DA 
 
Independent Auditor 
Ernst & Young LLP 
PO Box 9 
Royal Chambers 
St Julian's Avenue 
St Peter Port 
Guernsey GY1 4AF 
 
UK Solicitor 
Ashurst LLP 
London Fruit & Wool Exchange 
1 Duval Square 
London E1 6PW 
 
US Lawyers 
Monge Law Firm, PLLC 
435 South Tryon Street, Suite 711 
Charlotte, NC 28202 
 
Mayer Brown LLP 
214 North Tryon Street 
Suite 3800 
Charlotte NC 28202 
 
Winston & Strawn LLP 
35 West Wacker Drive 
Chicago IL 60601-9703 
 
Guernsey Lawyer 
Mourant 
Royal Chambers 
St Julian's Avenue 
St Peter Port 
Guernsey GY1 4HP 
 
Financial Adviser and Broker 
JP Morgan Cazenove Limited 
20 Moorgate 
London EC2R 6DA 
 
 
 
Useful Information for Shareholders 
 
Listing 
 
JZCP Ordinary and Zero Dividend Preference ("ZDP") shares are listed on the 
Official List of the Financial Services Authority of the UK, and are admitted 
to trading on the London Stock Exchange Specialist Fund Segment for listed 
securities. 
 
The price of the Ordinary shares are shown in the Financial Times under 
"Conventional Private Equity" and can also be found at https://markets.ft.com 
along with the prices of the ZDP shares. 
 
ISIN/SEDOL numbers 
 
                                       Ticker Symbol          ISIN Code    Sedol Number 
 
Ordinary shares                                 JZCP       GG00B403HK58         B403HK5 
 
ZDP (2022) shares                               JZCZ       GG00BZ0RY036         BZ0RY03 
 
Key Information Documents 
 
JZCP produces Key Information Documents to assist investors' understanding of 
the Company's securities and to enable comparison with other investment 
products. These documents are found on the Company's website - www.jzcp.com/ 
investor-relations/key-information-documents. 
 
Alternative Performance Measures 
 
In accordance with ESMA Guidelines on Alternative Performance Measures 
("APMs"), the Board has considered what APMs are included in the Interim Report 
and Financial Statements which require further clarification. An APM is defined 
as a financial measure of historical or future financial performance, financial 
position, or cash flows, other than a financial measure defined or specified in 
the applicable financial reporting framework. APMs included in the Interim 
Report and Financial Statements, which are unaudited and outside the scope of 
IFRS, are deemed to be as follows: 
 
Total NAV Return 
 
The Total NAV Return measures how the net asset value ("NAV") per share has 
performed over a period of time, taking into account both capital returns and 
dividends paid to shareholders. JZCP quotes NAV total return as a percentage 
change from the start of the period (one year) and also three-month, 
three-year, five-year and seven year periods. It assumes that dividends paid to 
shareholders are reinvested back into the Company therefore future NAV gains 
are not diminished by the paying of dividends. JZCP also produces an adjusted 
Total NAV Return which excludes the effect of the appreciation/dilution per 
share caused by the buy back/issue of shares at a discount to NAV, the result 
of the adjusted Total NAV return is to provide a measurement of how the 
Company's Investment portfolio contributed to NAV growth adjusted for the 
Company's expenses and finance costs. The Total NAV Return for the period ended 
31 August 2021 was -4%, which only reflects the change in NAV as no dividends 
were paid during the year. The Total NAV Return for the year ended 28 February 
2021 was -30.8%. 
 
Total Shareholder Return (Ordinary shares) 
 
A measure showing how the share price has performed over a period of time, 
taking into account both capital returns and dividends paid to shareholders. 
JZCP quotes shareholder price total return as a percentage change from the 
start of the period (one year) and also three-month, three-year, five-year and 
seven-year periods. It assumes that dividends paid to shareholders are 
reinvested in the shares at the time the shares are quoted ex dividend. The 
Shareholder Return for the period ended 31 August 2021 was +53.8%, which only 
reflects the change in share price as no dividends were paid during the year. 
The Shareholder Return for the year ended 28 February 2021 was -69.8%. 
 
NAV to market price discount 
 
The NAV per share is the value of all the company's assets, less any 
liabilities it has, divided by the number of shares. However, because JZCP 
shares are traded on the London Stock Exchange's Specialist Fund Segment, the 
share price may be higher or lower than the NAV. The difference is known as a 
discount or premium. JZCP's discount is calculated by expressing the difference 
between the period end dollar equivalent share price and the period end NAV per 
share as a percentage of the NAV per share. 
 
At 31 August 2021, JZCP's Ordinary shares traded at £1.20 (28 February 2021: £ 
0.78) or $1.65 (28 February 2021: $1.09) being the dollar equivalent using the 
period end exchange rate of £1:1.38 (28 February 2021 £1: $1.40). The shares 
traded at a 60% (28 February 2021: 74%) discount to the NAV per share of $4.08 
(28 February 2021: $4.25). 
 
Criminal Facilitation of Tax Evasion 
 
The Board has approved a policy of zero tolerance towards the criminal 
facilitation of tax evasion, in compliance with the Criminal Finances Act 2017. 
 
Non-Mainstream Pooled Investments 
 
From 1 January 2014, the FCA rules relating to the restrictions on the retail 
distribution of unregulated collective investment schemes and close substitutes 
came into effect. JZCP's Ordinary shares qualify as an 'excluded security' 
under these rules and will therefore be excluded from the FCA's restrictions 
which apply to non-mainstream investment products. Therefore, Ordinary shares 
issued by JZ Capital Partners can continue to be recommended by financial 
advisers as an investment for UK retail investors. 
 
Internet Address 
 
The Company: www.jzcp.com 
 
Financial Diary 
 
Results for the year ended 28 February 2022           May 2022 (date to be confirmed) 
 
Annual General Meeting                                June/July 2022 (date to be 
                                                      confirmed) 
 
Interim report for the six months ended 31 August     November 2022 (date to be 
2022                                                  confirmed) 
 
 
Payment of Dividends 
 
In the event of a cash dividend being paid, the dividend will be sent by cheque 
to the first-named shareholder on the register of members at their registered 
address, together with a tax voucher. At shareholders' request, where they have 
elected to receive dividend proceeds in Sterling, the dividend may instead be 
paid direct into the shareholder's bank account through the Bankers' Automated 
Clearing System. Payments will be paid in US dollars unless the shareholder 
elects to receive the dividend in Sterling. Existing elections can be changed 
by contacting the Company's Transfer and Paying Agent, Equiniti Limited on +44 
(0) 121 415 7047. 
 
Share Dealing 
 
Investors wishing to buy or sell shares in the Company may do so through a 
stockbroker. Most banks also offer this service. 
 
Foreign Account Tax Compliance Act 
 
The Company is registered (with a Global Intermediary Identification Number 
CAVBUD.999999.SL.831) under The Foreign Account Tax Compliance Act ("FATCA"). 
 
Share Register Enquiries 
 
The Company's UK Transfer and Paying Agent, Equiniti Limited, maintains the 
share registers. In event of queries regarding your holding, please contact the 
Registrar on 0871 384 2265, calls to this number cost 8p per minute from a BT 
landline, other providers' costs may vary. Lines are open 8.30 a.m. to 5.30 
p.m., Monday to Friday, If calling from overseas +44 (0) 121 415 7047 or access 
their website at www.equiniti.com. Changes of name or address must be notified 
in writing to the Transfer and Paying Agent. 
 
Nominee Share Code 
 
Where notification has been provided in advance, the Company will arrange for 
copies of shareholder communications to be provided to the operators of nominee 
accounts. Nominee investors may attend general meetings and speak at meetings 
when invited to do so by the Chairman. 
 
Documents Available for Inspection 
 
The following documents will be available at the registered office of the 
Company during usual business hours on any weekday until the date of the Annual 
General Meeting and at the place of the meeting for a period of fifteen minutes 
prior to and during the meeting: 
 
(a) the Register of Directors' Interests in the stated capital of the Company; 
 
(b) the Articles of Incorporation of the Company; and 
 
(c) the terms of appointment of the Directors. 
 
Warning to Shareholders - Boiler Room Scams 
 
In recent years, many companies have become aware that their shareholders have 
been targeted by unauthorised overseas-based brokers selling what turn out to 
be non-existent or high risk shares, or expressing a wish to buy their shares. 
If you are offered, for example, unsolicited investment advice, discounted JZCP 
shares or a premium price for the JZCP shares you own, you should take these 
steps before handing over any money: 
 
.    Make sure you get the correct name of the person or organisation 
 
.    Check that they are properly authorised by the FCA before getting involved 
by visiting http://www.fca.org.uk/firms/systems-reporting/register 
 
.    Report the matter to the FCA by calling 0800 111 6768 
 
.    If the calls persist, hang up 
 
.    More detailed information on this can be found on the Money Advice Service 
website www.moneyadviceservice.org.uk 
 
US Investors 
 
General 
 
The Company's Articles contain provisions allowing the Directors to decline to 
register a person as a holder of any class of ordinary shares or other 
securities of the Company or to require the transfer of those securities 
(including by way of a disposal effected by the Company itself) if they believe 
that the person: 
 
(a) is a "US person" (as defined in Regulation S under the US Securities Act of 
1933, as amended) and not a "qualified purchaser" (as defined in the US 
Investment Company Act of 1940, as amended, and the related rules thereunder); 
 
(b) is a "Benefit Plan Investor" (as described under "Prohibition on Benefit 
Plan Investors and Restrictions on Non-ERISA Plans" below); or 
 
(c) is, or is related to, a citizen or resident of the United States, a US 
partnership, a US corporation or a certain type of estate or trust and that 
ownership of any class of ordinary shares or any other equity securities of the 
Company by the person would materially increase the risk that the Company could 
be or become a "controlled foreign corporation" (as described under "US Tax 
Matters"). 
 
In addition, the Directors may require any holder of any class of ordinary 
shares or other securities of the Company to show to their satisfaction whether 
or not the holder is a person described in paragraphs (A), (B) or (C) above. 
 
US Securities Laws 
 
The Company (a) is not subject to the reporting requirements of the US 
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and does not 
intend to become subject to such reporting requirements and (b) is not 
registered as an investment company under the US Investment Company Act of 
1940, as amended (the "1940 Act"), and investors in the Company are not 
entitled to the protections provided by the 1940 Act. 
 
Prohibition on Benefit Plan Investors and Restrictions on Non-ERISA Plans 
 
Investment in the Company by "Benefit Plan Investors" is prohibited so that the 
assets of the Company will not be deemed to constitute "plan assets" of a 
"Benefit Plan Investor". The term "Benefit Plan Investor" shall have the 
meaning contained in 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) 
of the US Employee Retirement Income Security Act of 1974, as amended 
("ERISA"), and includes (a) an "employee benefit plan" as defined in Section 3 
(3) of ERISA that is subject to Part 4 of Title I of ERISA; (b) a "plan" 
described in Section 4975(e)(1) of the US Internal Revenue Code of 1986, as 
amended (the "Code"), that is subject to Section 4975 of the Code; and (c) an 
entity whose underlying assets include "plan assets" by reason of an employee 
benefit plan's or a plan's investment in such entity. For purposes of the 
foregoing, a "Benefit Plan Investor" does not include a governmental plan (as 
defined in Section 3(32) of ERISA), a non-US plan (as defined in Section 4(b) 
(4) of ERISA) or a church plan (as defined in Section 3(33) of ERISA) that has 
not elected to be subject to ERISA. 
 
Each purchaser and subsequent transferee of any class of ordinary shares (or 
any other class of equity interest in the Company) will be required to 
represent, warrant and covenant, or will be deemed to have represented, 
warranted and covenanted, that it is not, and is not acting on behalf of or 
with the assets of, a Benefit Plan Investor to acquire such ordinary shares (or 
any other class of equity interest in the Company). 
 
Under the Articles, the directors have the power to require the sale or 
transfer of the Company's securities in order to avoid the assets of the 
Company being treated as "plan assets" for the purposes of ERISA. 
 
The fiduciary provisions of laws applicable to governmental plans, non-US plans 
or other employee benefit plans or retirement arrangements that are not subject 
to ERISA (collectively, "Non-ERISA Plans") may impose limitations on investment 
in the Company. Fiduciaries of Non-ERISA Plans, in consultation with their 
advisers, should consider, to the extent applicable, the impact of such 
fiduciary rules and regulations on an investment in the Company. 
 
Among other considerations, the fiduciary of a Non-ERISA Plan should take into 
account the composition of the Non- ERISA Plan's portfolio with respect to 
diversification; the cash flow needs of the Non-ERISA Plan and the effects 
thereon of the illiquidity of the investment; the economic terms of the Non- 
ERISA Plan's investment in the Company; the Non- ERISA Plan's funding 
objectives; the tax effects of the investment and the tax and other risks 
associated with the investment; the fact that the investors in the Company are 
expected to consist of a diverse group of investors (including taxable, 
tax-exempt, domestic and foreign entities) and the fact that the management of 
the Company will not take the particular objectives of any investors or class 
of investors into account. 
 
Non-ERISA Plan fiduciaries should also take into account the fact that, while 
the Company's board of directors and its investment adviser will have certain 
general fiduciary duties to the Company, the board and the investment adviser 
will not have any direct fiduciary relationship with or duty to any investor, 
either with respect to its investment in Shares or with respect to the 
management and investment of the assets of the Company. Similarly, it is 
intended that the assets of the Company will not be considered plan assets of 
any Non-ERISA Plan or be subject to any fiduciary or investment restrictions 
that may exist under laws specifically applicable to such Non-ERISA Plans. Each 
Non-ERISA Plan will be required to acknowledge and agree in connection with its 
investment in any securities to the foregoing status of the Company, the board 
and the investment adviser that there is no rule, regulation or requirement 
applicable to such investor that is inconsistent with the foregoing description 
of the Company, the board and the investment adviser. 
 
Each purchaser or transferee that is a Non-ERISA Plan will be deemed to have 
represented, warranted and covenanted as follows: 
 
(a) The Non-ERISA Plan is not a Benefit Plan Investor; 
 
(b) The decision to commit assets of the Non-ERISA Plan for investment in the 
Company was made by fiduciaries independent of the Company, the Board, the 
Investment adviser and any of their respective agents, representatives or 
affiliates, which fiduciaries (i) are duly authorized to make such investment 
decision and have not relied on any advice or recommendations of the Company, 
the Board, the Investment adviser or any of their respective agents, 
representatives or affiliates and (ii) in consultation with their advisers, 
have carefully considered the impact of any applicable federal, state or local 
law on an investment in the Company; 
 
(c) The Non-ERISA Plan's investment in the Company will not result in a 
non-exempt violation of any applicable federal, state or local law; 
 
(d) None of the Company, the Board, the Investment adviser or any of their 
respective agents, representatives or affiliates has exercised any 
discretionary authority or control with respect to the Non-ERISA Plan's 
investment in the Company, nor has the Company, the Board, the Investment 
adviser or any of their respective agents, representatives or affiliates 
rendered individualized investment advice to the Non-ERISA Plan based upon the 
Non-ERISA Plan's investment policies or strategies, overall portfolio 
composition or diversification with respect to its commitment to invest in the 
Company and the investment program thereunder; and 
 
(e) It acknowledges and agrees that it is intended that the Company will not 
hold plan assets of the Non-ERISA Plan and that none of the Company, the Board, 
the Investment adviser or any of their respective agents, representatives or 
affiliates will be acting as a fiduciary to the Non-ERISA Plan under any 
applicable federal, state or local law governing the Non- ERISA Plan, with 
respect to either (i) the Non-ERISA Plan's purchase or retention of its 
investment in the Company or (ii) the management or operation of the business 
or assets of the Company. It also confirms that there is no rule, regulation, 
or requirement applicable to such purchaser or transferee that is inconsistent 
with the foregoing description of the Company, the Board and the Investment 
adviser. 
 
US Tax Matters 
 
This discussion does not constitute tax advice and is not intended to be a 
substitute for tax advice and planning. Prospective holders of the Company's 
securities must consult their own tax advisers concerning the US federal, state 
and local income tax and estate tax consequences in their particular situations 
of the acquisition, ownership and disposition of any of the Company's 
securities, as well as any consequences under the laws of any other taxing 
jurisdiction. 
 
The Board may decline to register a person as, or to require such person to 
cease to be, a holder of any class of ordinary shares or other equity 
securities of the Company because of, among other reasons, certain US ownership 
and transfer restrictions that relate to "controlled foreign corporations" 
contained in the Articles of the Company. A Shareholder of the Company may be 
subject to forced sale provisions contained in the Articles in which case such 
shareholder could be forced to dispose of its securities if the Company's 
directors believe that such shareholder is, or is related to, a citizen or 
resident of the United States, a US partnership, a US corporation or a certain 
type of estate or trust and that ownership of any class of ordinary shares or 
any other equity securities of the Company by such shareholder would materially 
increase the risk that the Company could be or become a "controlled foreign 
corporation" within the meaning of the Code (a "CFC"). Shareholders of the 
Company may also be restricted by such provisions with respect to the persons 
to whom they are permitted to transfer their securities. 
 
In general, a foreign corporation is treated as a CFC if, on any date of its 
taxable year, its "10% US Shareholders" collectively own (directly, indirectly 
or constructively within the meaning of Section 958 of the Code) more than 50% 
of the total combined voting power or total value of the corporation's stock. 
For this purpose, a "10% US Shareholder" means any US person who owns 
(directly, indirectly or constructively within the meaning of Section 958 of 
the Code) 10% or more of the total combined voting power of all classes of 
stock of a foreign corporation or 10% or more of the total value of shares of 
all classes of stock of a foreign corporation. The Tax Cuts and Jobs Act (the 
"Tax Act") eliminated the prohibition on "downward attribution" from non-US 
persons to US persons under Section 958(b)(4) of the Code for purposes of 
determining constructive stock ownership under the CFC rules. As a result, the 
Company's US subsidiary will be deemed to own all of the stock of the Company's 
non-US subsidiaries held by the Company for purposes of determining such 
foreign subsidiaries' CFC status. The legislative history under the Tax Act 
indicates that this change was not intended to cause the Company's non-US 
subsidiaries to be treated as CFCs with respect to a 10% US Shareholder that is 
not related to the Company's US subsidiary. However, the IRS has not yet issued 
any guidance confirming this intent and it is not clear whether the IRS or a 
court would interpret the change made by the Tax Act in a manner consistent 
with such indicated intent. The Company's treatment as a CFC as well as its 
foreign subsidiaries' treatment as CFCs could have adverse tax consequences for 
10% US Shareholders. 
 
The Company has been advised that it is NOT a passive foreign investment 
company ("PFIC") for the fiscal years ended February 2020 and 2019. An analysis 
for the financial year ended 28 February 2021 is currently being undertaken. A 
classification as a PFIC would likely have adverse tax consequences for US 
taxpayers. 
 
The taxation of a US taxpayer's investment in the Company's securities is 
highly complex. Prospective holders of the Company's securities must consult 
their own tax advisers concerning the US federal, state and local income tax 
and estate tax consequences in their particular situations of the acquisition, 
ownership and disposition of any of the Company's securities, as well as any 
consequences under the laws of any other taxing jurisdiction. 
 
Investment Adviser's ADV Form 
 
Shareholders and state securities authorities wishing to view the Investment 
Adviser's ADV form can do so by following the link below: 
 
https://adviserinfo.sec.gov/firm/summary/160932 
 
 
 
END 
 
 

(END) Dow Jones Newswires

November 11, 2021 02:00 ET (07:00 GMT)

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