Flow Capital Announces Proposed Preferred Share Offering￼
TORONTO, June 9, 2022 – Flow Capital Corp. (TSXV: FW) (“Flow Capital” or the “Company“) is pleased to announce a proposed offering of up to 1,811,666 newly created Series I Class A Preferred Shares (the “Series I Class A Preferred Shares“) on a private placement basis at a price of $3.00 per Series I Class A Preferred Share, for gross proceeds of approximately $5,435,000 (the “Offering“).
The Series I Class A Preferred Shares, which are non-voting and non-convertible except in each case in certain limited circumstances, carry a cumulative dividend of 9.2%, paid quarterly, and are redeemable by the Company six years following the initial issuance date. In addition, a holder of Series I Class A Preferred Shares may elect to require the Company to redeem up to 1/3rd of the holder’s Series I Class A Preferred Shares on the third, fourth and fifth anniversaries, respectively, of the initial issuance date. The Series I Class A Preferred Shares will not be listed on any stock exchange.
No finder’s fees are anticipated to be paid by the Company in connection with the Offering.
The Company anticipates using the net proceeds of the Offering to fund additional venture debt investments into high growth companies and for general working capital purposes.
Completion of the Offering is subject to the satisfaction of customary closing conditions, including the approval of the TSX Venture Exchange. The Company expects to complete the Offering in one or more tranches, with the initial closing expected to be completed in June, 2022. The Series I Class A Preferred Shares issued pursuant to the Offering will be subject to a hold period of four months and one day from the applicable issuance date in accordance with applicable securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release. Such securities have not been, and will not be, registered under the U.S. Securities Act, or any state securities laws, and, accordingly, may not be offered or sold within the United States, or to or for the account or benefit of persons in the United States or “U.S. Persons”, as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.
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.
Chief Executive Officer
1 Adelaide Street East, Suite 3002,
PO Box 171,
Toronto, Ontario M5C 2V9
Forward-Looking Information and Statements
This press release contains certain “forward-looking information” and “forward-looking statements” within the meaning of applicable securities legislation. 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”. 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. Forward-looking information in this press release includes, but is not limited to, information concerning the proposed completion of the Offering and the Company’s proposed use of the gross proceeds of the Offering.
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, including its ability to satisfy required payments under the Transaction. 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.