Flow Capital Announces Mailing of Substantial Issuer Bid Circular

TORONTO, September 3 – Flow Capital Corp. (TSXV: FW) (“Flow Capital” or the “Company”) announces, further to its press release issued on August 29, 2019, that the issuer bid circular in relation to the Company’s substantial issuer bid (the “Offer”) has been mailed to holders of common shares (the “Common Shares”) of the Company. Under the terms of the Offer, the Company will offer to repurchase for cancellation up to $4 million of its outstanding Common Shares.

The Offer commenced on August 29, 2019 and will expire at 5:00 p.m. (Eastern Time) on October 7, 2019, unless extended or withdrawn. The Company has engaged Computershare Trust Company of Canada to act as the depositary for the Offer. 

The Offer is being made by way of a “modified Dutch auction”, which will allow shareholders who choose to participate in the Offer to individually select the price, within a range of not less than $0.15 per Common Share and not more than $0.20 per Common Share (in increments of $0.01 per Common Share), at which they are willing to sell their Common Shares. Upon expiry of the Offer, the Company will determine the lowest purchase price (which will not be less than $0.15 per Common Share and not more than $0.20 per Common Share) that will allow it to purchase the maximum number of Common Shares properly tendered to the Offer, and not properly withdrawn, having an aggregate purchase price not exceeding $4 million. 

Shareholders who wish to participate in the Offer will be able to do so through (i) auction tenders in which they will specify the number of Common Shares being tendered at a specific price per Common Share, or (ii) purchase price tenders in which they will agree to have a specified number of Common Shares purchased at the purchase price to be determined pursuant to the auction and have their Common Shares considered as having been tendered at the minimum price of $0.15 for the purposes of determining the purchase price. Shareholders who validly deposit Common Shares without specifying the method in which they are tendering their Common Shares will be deemed to have made a purchase price tender. 

The directors and officers of the Company have advised that they will not tender any of their shares pursuant to the Offer. 

During the seven months ended July 31, 2019, the closing prices of the Common Shares on the TSX Venture Exchange (“TSXV”) have ranged from a low of $0.085 to a high of $0.16. The closing price of the Common Shares on the TSXV on August 28, 2019 (the last full trading day before the Company announced its intention to make the Offer) was $0.13. 

As of August 28, 2019, 83,402,764 Common Shares were issued and outstanding. Accordingly, the Offer is for up to 26,666,666 Common Shares or approximately 32.0% of the total number of Common Shares now issued and outstanding, if the purchase price is determined to be the minimum purchase price per Common Share of $0.15 or up to 20,000,000 Common Shares or approximately 24.0% of the total number of Common Shares now issued and outstanding, if the – 2 – 9020085-00082466.DOCX:5 purchase price is determined to be the maximum purchase price per Common Share of $0.20 (in each case, based on full participation). 

The Offer is optional for all shareholders, who are free to choose whether to participate, how many Common Shares to tender and, in the case of auction tenders, at what price to tender within the specified range. Any shareholders who do not deposit their Common Shares (or whose Common Shares are not repurchased under the Offer) will realize a proportionate increase in their equity interest in the Company, to the extent that Common Shares are purchased under the Offer. 

The Offer is not conditional upon any minimum number of Common Shares being tendered but is subject to various other conditions disclosed in the formal offer to purchase and issuer bid circular. 

The Company reserves the right, subject to applicable laws, to withdraw or amend the Offer, if certain events occur. The Offer is expected to remain open for acceptance until 5:00 p.m. (Eastern Time) on October 7, 2019, unless extended or withdrawn. 

Neither the Company nor its board of directors makes any recommendation to any shareholder as to tender or refrain from tendering shares, and the Company has not authorized any individual to make such recommendation. Shareholders are strongly urged to read and carefully evaluate all information in the Offer Documents before making any decision with respect to the tender offer and should consult their own broker or other financial and tax advisors prior to making any decision with respect to the Offer. 

This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. Details of the Offer, including instructions for tendering Common Shares, will be included in the formal offer to purchase and issuer bid circular, letter of transmittal and notice of guaranteed delivery (collectively, the “Offer Documents”). The Offer Documents will be mailed to shareholders, filed with applicable Canadian securities regulatory authorities and made available on SEDAR at www.sedar.com, and will also be posted on the Company’s website at www.flowcap.com

About Flow Capital

Flow Capital Corp. is a diversified alternative asset investor and advisor, specializing in providing minimally dilutive capital to emerging growth businesses. To apply for financing, visit www.flowcap.com.

For further information, please contact:

Flow Capital Corp.

Alex Baluta
Chief Executive Officer
[email protected]
Phone: (416) 777-0383

1 Adelaide Street East, Suite 3002,
Toronto, Ontario M5C 2V9

Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Flow Capital’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Flow Capital’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein may include, but is not limited to, information with respect to: the company’s prospective financial performance, including the company’s opinion regarding the current and future performance of its portfolio, expenses and operations; anticipated cash needs and need for additional financing; anticipated funding sources; future growth plans; royalty acquisition targets and proposed or completed royalty transactions; estimated operating costs; estimated market drivers and demand; business prospects and strategy; anticipated trends and challenges in the Company’s business and the markets in which it operates; and the company’s financial position. By identifying such information and statements in this manner, Flow Capital is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.

An investment in securities of the company is speculative and subject to a number of risks including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in the company; the volatility of the company’s share price; the company’s ability to generate sufficient revenues; the company’s ability to manage future growth; the limited diversification in the company’s existing investments; the company’s ability to negotiate additional royalty purchases or other forms of investment from new investee companies; the company’s dependence on the operations, assets and financial health of its investee companies; the company’s limited ability to exercise control or direction over investee companies; potential defaults by investee companies and the unsecured nature of certain of the company’s investments; the company’s ability to enforce on any default by an investee company; competition with other investment entities; tax matters, including the potential impact of the Foreign Account Tax Compliance Act on the company; the potential impact of the company being classified as a Passive Foreign Investment Company; the company’s ability to pay dividends in the future and the timing and amount of those dividends; reliance on key personnel; dilution of shareholders’ interest through future financings; and general economic and political conditions; as well as the risks discussed in the company’s public filings. Although Flow Capital has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

In connection with the forward-looking information and forward-looking statements contained in this press release, Flow Capital has made certain assumptions. Assumptions about the performance of the Canadian and U.S. economies over the next 24 months and how that will affect the company’s business and its ability to identify and close new opportunities with new investees are material factors that the company considered when setting its strategic priorities and objectives, and its outlook for its business. Although Flow Capital believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.

The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Flow Capital does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to Flow Capital or persons acting on its behalf is expressly qualified in its entirety by this notice.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.