Company Overview - Peregrine Investment Management is a small investment management firm with $161 million in assets under management and 19 holdings [1][3] - Universal Display is a leader in OLED technology, holding around 5,500 patents globally and focusing on licensing and material sales [2][3] Recent Developments - Peregrine fully liquidated its position in Universal Display, selling 50,560 shares valued at approximately $7.26 million as of November 6 [5][4] - Universal Display's stock price decreased by 18% over the past year, significantly underperforming the S&P 500 by 32.32 percentage points [4] Financial Performance - Universal Display experienced a challenging end to 2025, with a nearly 20% decline in stock price from October 1 to December 31, and reported a 14% year-over-year decrease in sales and a 34% decline in earnings [6][8] - The company is set to report its fourth-quarter and full-year earnings results for 2025 on February 19, 2026 [8] Strategic Moves - Despite recent challenges, Universal Display announced an agreement to acquire OLED patent assets from Merck KGaA, which includes over 300 patents with an average remaining lifetime of about 10 years [7]

Financial Data and Key Metrics Changes - The company reported net income of $2 million, or $0.03 per unit, and cash available for distribution (CAD) of $4.6 million, or $0.20 per unit for Q3 2025 [14] - Book value per unit increased to $12.36, up $0.53 from June 30, primarily due to an increase in unrealized gains on the mortgage revenue bond portfolio [15] - The closing unit price was $8.24, representing a 33% discount to the book value per unit as of September 30 [16] Business Line Data and Key Metrics Changes - Fiscal occupancy for the stabilized mortgage revenue bond portfolio was 87.8% as of September 30, down from 88.4% as of June 30, mainly due to higher vacancies in Texas [5][6] - The company has 11 current investments, with 7 completed and leasing, 2 nearly completed, and 2 in future development [6][8] - The joint venture equity investments portfolio had a carrying value of approximately $154 million as of September 30, with remaining funding commitments totaling $19.5 million [20] Market Data and Key Metrics Changes - The U.S. municipal bond market saw improvement, with 10-year MMD decreasing from 3.21% to 2.92% and 30-year MMD from 4.58% to 4.24% during Q3 2025 [25] - The trend of heavy municipal bond issuance continued, with high fund flows into the muni market [25] - The company noted that only 9% of its debt investments are secured by projects receiving Section 8 subsidies, which may be impacted by the federal government shutdown [26] Company Strategy and Development Direction - The company plans to reduce capital allocation to joint venture equity investments in market-rate multifamily properties and focus more on tax-exempt mortgage revenue bonds [10][11] - The strategy aims to provide more stable earnings and increase the proportion of tax-exempt income allocated to unit holders [12] - The company remains positive on the market-rate seniors' housing segment and will continue to evaluate investment opportunities in that area [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that higher interest rates and multifamily capitalization rates are negatively impacting asset values and returns on sales [9] - The company expects occupancy levels to recover as new supply deliveries decline and available units are absorbed [6] - Management is assessing the potential impact of the strategic shift on short-term and long-term earnings expectations and unit holder distributions [13] Other Important Information - The company reported no forbearance requests for mortgage revenue bonds and governmental issuer loans, with all borrowers current on payments as of September 30 [19] - The company issued Series B preferred units for gross proceeds of $5 million in October 2025 to support investment commitments and operations [16][24] Q&A Session Summary Question: Capital allocation targets for multifamily units - Management indicated that future capital allocation will depend on the timing of capital returns from existing joint venture equity exits and current opportunities, with no set percentage at this time [30] Question: Expected pace of asset sales and occupancy stabilization - Management noted that the timeline for sales may be extended due to slower leasing activity in Texas and the need to reach critical occupancy levels before listing properties for sale [32] Question: Strategic shift away from joint venture investments and expected earnings pickup - Management highlighted the benefits of reduced earnings volatility and increased tax-exempt income from new investments, but stated it is too early to provide specific guidance on earnings pickup [35] Question: Cap rates for senior housing investments - Management clarified that they did not purchase properties during low cap rate periods but invested in to-be-built properties, and they continue to evaluate opportunities based on risk-adjusted returns [41][42] Question: Provision for credit losses despite improving municipal bond market - Management explained that the provision for credit losses was related to specific underperforming properties, and the overall portfolio quality remained consistent [50][54]