We are not naive enough to not be aware that there are bear cases for why small cap companies will underperform for the next decade. I am sure there are myriads of investors who have charts to bolster their bearish thesis. I have often told you that the price you pay for the business you buy is the first and key factor in determining whether or not you’ll be ultimately successful in that particular investment. It would be an understatement at this point to say that we may that we own many companies who stock prices and valuations, we believe materially understate the true values of those businesses. The starting point is price, and we believe the price is right for the potential for material upside in our portfolio. If you believe I’m right, you should own turn in your portfolio.
If you don’t, then you shouldn’t. I currently own 680,000 shares and Daniel currently owns 229,000 shares. You can certainly expect that our ownership levels will continue to grow in the future through open market purchases. One day I hope to be able to reference this call as the bottom. As always, thank you for your support. I’ll now turn the call over to Daniel.
Daniel Wolfe: Thank you, Kevin. Please turn to Slide 22. While many of 180 Degree’s current portfolio companies have generally been swept up in the recent vicious market selling particularly for microcap companies, we do not believe the businesses and the balance sheets of many of these holdings reflect the distress that their falling stock prices indicate. This slide provides examples of some recent announcements from our pro portfolio companies that show that clearly show in our view that these companies are continue to execute on their business plans and we believe are set up well for value creation for their shareholders including 180 Degree Capital. For example, Potbelly announced a new shop development agreement for 36 shops and 4 refranchise shops that bring its new contracted franchise shops to 150.
It also announced record average unit volumes and continued growth in shop level margins and gain in market share. Synchronous sold its non-core assets and now is a pure play cloud service company that is currently expected to generate material positive free cash flows and 25% EBITDA margins in ’24. Arena Group signed a definitive agreement to merge with Bridge Media, a company owned by the founder and owner of Five Hour Energy that will result in a combined company with 100 owned and affiliated stations and over the top partnerships across 46 states. On top of the assets that Arena brings to the combination. Intevac is in the final stages of certification for its new TRIO tool with its partner. Corning. Lantronix announced that it is beginning volume production of its smart-meter product for Gridspertise or Enel that is expected to drive material organic growth and profitability in 2024 In summary, these are all positive news for each of these companies.
While our performance has been challenged over the past seven quarters after five years of strong performance, the notes above are just a portion of the reasons we believe our portfolio is positioned well for the creation of value for shareholders in ‘24 and beyond. We’ll use this period to ramp up our collegial and constructive activism. We are keenly aware that hope is not a strategy, activism is. As Kevin noted earlier in this call and we announced in the press release yesterday, 180’s Board has initiated the discount management program with an initial two measurement periods beginning January 1st of ‘24 to the end of ‘24 and January 1st of ‘25 to June30th of ‘25. Should 180 Degree Capital’s common stock traded an average daily discount to NAV of more than the current average trading discount of other equity closed end funds, which is about 12%.
During either of these measurement periods then 180 Degree’s Board will consider all available options including but not limited to significant expansion of our buyback program where 180 repurchases stock through open market trades, cash distributions in the forms of dividends or returns of capital depending on in your gains or tender offer where shareholders will be able to decide, if they wanted to sell a portion of their holdings back to 180 at a price per share that is set by 180’s Board. To be clear, any decision regarding actions taken at the end of each measurement period as a result of this program remains with 180 Capital’s Board and has not been made today. We believe that the existence of the program and its associate measurement periods demonstrates the continued focus of both 180’s Board and management team on taking active steps to minimize any persistent discount in 180 share price.
In the future, 180’s Board may or may not determine to extend the program beyond June of ‘25. During these measurement periods, as Kevin mentioned, we fully expect the management will continue to purchase turn stock in the open market. To be clear and reiterate what Kevin said, the most important thing we can do is find investments that materially increased value so that NAV — as a result, NAV increases from its current values. We believe that we will have the most impact — that we will have the most impactful effect and positive effect on turn stock price and returns to our shareholders. Lastly, I would like to note that we included the sides we normally present on these calls in an appendix at the end of the slide deck on our website.
We’re not going to discuss them on today’s call, but we’d be happy to answer any questions on them anytime. We would now like to open the line for questions.
A – Daniel Wolfe: [Operator Instructions] Hi, Oliver, please go ahead. Oliver? Okay, so, we’ll move to our next question. Hi, Dennis, please go ahead. Dennis, if your line is on mute, you may have to turn off of mute.
Unidentified Analyst: Sorry. Since there’s been a large decrease in the value of AgBiome in a short period of time, could you please just go over what happened there?
Daniel Wolfe: Dennis, this is Dan. I’ll be happy to provide some additional detail. As you know, the venture industry is in somewhat of disarray, especially with follow up financing with later stage companies. AgBiome raised a significant amount of capital in I believe it was ‘21 or ‘20. And they have a business that requires a substantial amount of capital to continue operations. They embarked on a concerted effort with a bank to raise capital. And thus far, that has not been successful. There were indications that they, in mid-year, that they were making progress on that effort. We did actually — the valuation has come down significantly since the beginning of the year, reflecting both status of their business as well as the financing environment.
